NEW WALL OF NON-OPEC' OIL COMING TO MARKET AS US SEIZURE OF VENEZUELA UNFOLDS - EXPERT

WASHINGTON, Jan 4 (Bernama-Sputnik/RIA Novosti) -- The global oversupply in oil is likely to exceed levels previously forecast for this year, posing a new challenge to the Organisation of Petroleum Exporting Countries (OPEC) as Venezuela looks poised to pump more crude under US charge, energy markets commentator John Kilduff told RIA Novosti.

"OPEC could be overwhelmed by a new wall of non-OPEC supply that’s coming to the market," said Kilduff, partner at New York energy hedge fund Again Capital and a leading voice on the geopolitical risk in energy markets.

Following the capture of Venezuelan President Nicolas Maduro and his wife on Saturday, the Trump administration announced that it would be "running" both the Latin American country and its oil trade.

OPEC estimated Venezuelan crude production at approximately 1.1 million barrels per day (bpd) in its latest monthly report. China consistently absorbs between 75 per cent and 80 per cent of Venezuela's crude exports, estimated at around 900,000 bpd, OPEC said. The balance 200,000 bpd is refined domestically into fuels.

"My thinking is that with full US backing, Venezuelan production could gain an additional 200,000 bpd over the next three months," Kilduff said. "From there, it will likely climb by an average of 25,000 to 50,000 bpd each month. If you put it all together, we’re looking at a production high of 1.75 million bpd by the end of the year, or 60 per cent higher from current levels."

Eight oil producers in OPEC+ are to meet on Sunday to review their decision to freeze output hikes in the first quarter of this year. OPEC+, as a whole, is a 22-nation alliance comprising the 12-member OPEC and 10 other oil producing countries. The OPEC+ eight, however, form a core group of the alliance’s most influential members. This is the group that added almost 3 million barrels per day to supply last year, prioritising market share over prices.

The Venezuelan development could, however, be a new challenge to OPEC, said Kilduff, who noted that US production itself had hit a record high of 13.9 million bpd in 2025. On top of that, Brazil saw its own peak of 4.03 million bpd while Guyana crested at 900,000 bpd, he added.

Both OPEC and the US Energy Information Administration say that Venezuela has the world's largest proven oil reserves, estimated at approximately 303 billion barrels — or nearly one-fifth of the entire world’s proven crude reserves. To bring Venezuelan production back to its heyday output of around 3.5 million barrels, an investment of some US$58 billion to over US$110 billion would, however, be required, experts say.

US oil drillers ExxonMobil and ConocoPhillips were expelled in 2007 from production sharing contracts in Venezuela. Until the events of Saturday, Chevron was the only American oil company operating in Venezuela on a limited production sharing basis. The expulsion of the US oil majors had given US President Donald Trump the cover to say that Venezuela had "stolen" US oil, says critics of the US president, who contend that the United States itself was now robbing the Latin American state of its sovereign resources.

-- BERNAMA-SPUTNIK/RIA NOVOSTI