US attack on Venezuela: Impact on oil, Indian stock markets, energy stocks

Analyze how the US capture of President Maduro impacts India's energy security, RIL, ONGC, and the stock market. Get expert views from PL Capital & Choice Equity

US attack on Venezuela, India stock market impact

  The dramatic escalation of geopolitical tensions in South America following the US military operation to capture Venezuelan President Nicolas Maduro is sending ripples through global energy markets, with investors analysing implications for India’s energy security and equity markets. 

On January 3, 2026, US forces detained Maduro and his wife, Cilia Flores, to face narco-terrorism, cocaine importation conspiracy, among others, in New York.

  Soon after, Trump announced that the US oil companies will invest billions of dollars to revive Venezuela’s oil infrastructure and increase its oil output.

  Notably, Venezuela has the largest proven oil reserves with an estimate of 303.8 billion barrels as of 2020 (20 per cent of the world’s oil reserves), trailed by 297.5 billion barrels with Saudi Arabia.

 

  The next three largest reserves are 168.1 billion barrels (Canada), 157.8 billion barrels (Iran), and 145 billion barrels (Iraq).

  On the flipside, the United States is the largest oil consumer but has only 68.8 billion barrels of reserves.

  However, Venezuelan production has been disappointing with barely ~1 million barrels per day in November 2025 due to lack of expertise, under-investment, political interference, mis-management, corruption and economic sanctions. Oil production in the United States stands at 13.7 mnbpd and Saudi Arabia at 9.7 mnbpd.

  While the event triggered an immediate risk premium in crude prices, analysts suggest that for India, the development represents a dual narrative of short-term volatility and long-term strategic opportunity.

 

US attack on Venezuela impact: What it means for Indian stock markets?

The Indian stock markets were mostly resilient on Monday with the benchmarks – BSE Sensex and NSE Nifty – trading in a narrow range around the flat line.

  In the commodities market, while crude oil futures added about half a per cent, safe haven bets like silver and gold rose up to 3 per cent in trade on MCX.

  According to reports from PL Capital, the event is expected to create "short-term turbulence” in the oil markets, but the absence of an "Elder Wand" to immediately fix Venezuela’s crippled infrastructure means any increase in oil supply is unlikely for at least 3 to 6 months.

 

US-Venezuela conflict: Which stocks to benefit?

According to analysts, India’s upstream giants - ONGC Videsh and Oil India – may benefit from the US intervention. Choice Institutional Equities noted that Indian firms, which operate in the San Cristobal and Carabobo-1 fields, may finally gain the necessary access to equipment and technology previously barred by sanctions.

  "A significant increase in output remains limited due to years of underinvestment... but Indian upstream players may benefit as access to equipment and investments could be granted and output could be increased from the fields of San Cristobal and Carabobo-1, wherein Indian firms jointly operate with PDVSA," the report highlighted.

  As for refiners, the sector could benefit from import of heavier Venezuelan barrels, which are priced at a discount to Brent and may enable companies to generate higher gross refining margins (GRMs), analysts said.

  Moreover, if the heavier Venezuelan barrels could accelerate the rationing of simpler refineries globally as more complex refineries come online in India and China. it could ultimately lead to better cracks over the medium term as oil product supply balances at a faster pace, they said.  In this backdrop, shares of Reliance Industries (RIL) hit a fresh record high of ₹1,611.80 on January 5, as investors bet on the company's ability to source heavy Venezuelan crude at deep discounts. Similarly, ONGC shares rose nearly 2 per cent in early trade following projections that a US-led transition could unlock nearly $500 million in long-pending dividends from the San Cristobal field.

  Conversely, for Oil Marketing Companies (OMCs), the outlook is more cautious. While low oil prices generally support profitability, PL Capital warns of a potential hike in domestic excise duties, which OMCs might be forced to absorb, mirroring the fiscal adjustments seen in April 2025.

 

What does it means for investors?

According to analysts, the US attack on Venezuela will trigger short-term volatility in crude oil and gold that may mask a medium-term structural shift.

  In the short term, a "fear premium" is causing extreme volatility in heavy-sour oil spreads due to the naval blockade of Venezuela tankers, creating immediate shortages for Gulf Coast refineries.

  However, the medium-term outlook for oil appears bearish as the removal of Maduro may unleash Venezuela's significant reserves, potentially increasing production by 500,000 to 1 million barrels per day within two years if US companies resume operations.

  “This may cap the oil price upside in the near future as the market anticipates a future supply glut post-transition. For gold, this event is a tactical accelerator, but it does not change the core medium-term thesis, which remains tied to the Federal Reserve,” Choice Institutional Equities said.

 

Source: Brokerages

  US-Venezuela crisis: Oil price outlook

Choice Institutional Equities expects Brent to average at $61.5/barrel in CY26 amid hopes of limited additional barrels entering the market during the current year, resulting in limited downward pressure on oil prices.

  However, additional barrels from Venezuela may increase supply and weigh on prices beginning next year, it said.

Kaynat Chainwala, AVP Commodity Research, Kotak Securities, too, said that a US-led push to revive Venezuela’s oil industry could add barrels to the market in the medium term, capping a surge in oil prices.