Energy Stocks Soar After Maduro Arrest but Oil Prices Remain Flat Amid Sanctions Reality Check

Major US energy companies saw their share prices surge on Monday following the dramatic capture of Venezuelan President Nicolás Maduro, though oil markets remained largely unmoved as traders confronted the stark reality of existing sanctions and years-long infrastructure challenges that could delay any significant production increases.

Chevron, the only major American oil company currently operating in Venezuela, saw its shares jump 4.8% in early trading, whilst ConocoPhillips and Exxon Mobil also rose sharply. Despite the rally, Brent crude oil prices fell about 2% before recovering, reflecting deep scepticism that the political upheaval will translate into a quick boost in global oil supply.

Sanctions Remain Major Obstacle to Recovery

Despite Maduro's removal, US sanctions on Venezuela's oil sector remain in full effect, with Secretary of State Marco Rubio stating that the administration is maintaining its 'quarantine' of sanctioned Venezuelan oil. The US Treasury Department sanctioned four companies operating in Venezuela's oil sector just days before Maduro's capture.

According to industry experts, Venezuela's oil production has plummeted from a peak of approximately 3.5 million barrels per day in 1997 to an estimated 950,000 barrels per day currently, with around 550,000 barrels per day exported. Andy Lipow, president of Lipow Oil Associates, told CNBC that 'the Venezuelan oil industry is in such a state of disrepair that even with a change in government, it is unlikely to see any material increase in oil production for years as substantial investments are required'.

Defence Stocks and Gold Rally on Geopolitical Tensions

The military operation that led to Maduro's capture also triggered a surge in global defence stocks as investors reacted to heightened geopolitical tensions. US firms Northrop Grumman and Lockheed Martin rose 2.7% and 3.3%, respectively, whilst in Europe, German arms maker Rheinmetall jumped 8%, with the UK's BAE Systems and Italian defence firm Leonardo also increasing 4% and 6%, respectively.

Gold futures rallied about 2.5% on Monday to £3,285 ($4,438.70), whilst silver futures surged approximately 7.5% to £56 ($76.43). The precious metals rally reflected broader market anxiety around Trump's military action and potential for further regional instability, continuing gold's remarkable 60% gain in 2025—its best annual performance since 1979.

A Long Road to Recovery

The broader US market, represented by the S&P 500, rose 0.6% as investors largely shrugged off geopolitical concerns. However, the divergence between surging energy stocks and flat oil prices highlighted the market's recognition that translating political change into tangible increases in oil production will require years of investment. President Trump has stated that the US would 'run' Venezuela until a proper transition could take place, but specifics about governance and oil sector management remain unclear.

The capture of Maduro represents a potential turning point for Venezuela's oil sector, but market analysts caution against expecting immediate results. Venezuela possesses the world's largest proven oil reserves—estimated at about 303 billion barrels—yet decades of nationalisation, underinvestment, and sanctions have left its infrastructure in ruins. Francisco Rodriguez, former head of economic advisory for Venezuela's National Assembly, estimated that with sanctions removed, oil output could reach 2.5 million barrels per day 'in the scope of three to five years', a timeframe that underscores the long road ahead for any meaningful impact on global oil supplies.