Markets Stay Calm as Venezuela Crisis Fails to Rattle Global Equities: Ed Yardeni

Global financial markets have demonstrated remarkable resilience in the face of recent geopolitical developments surrounding Venezuela, with investors maintaining their composure despite heightened regional tensions. Market veteran Ed Yardeni from Yardeni Research observes that equities continue to hold firm while risk appetite remains largely intact, suggesting markets are focused more on fundamentals than fear.

Market Response to Venezuela Developments

Speaking to ET Now, Yardeni highlighted the selective nature of market reactions to the Venezuela situation. Gold behaved as expected during geopolitical uncertainty, with safe-haven demand driving significant price increases. Oil markets, however, surprised many observers with their muted response.

Asset Class:	Market Reaction	Performance Details
Gold:	Strong rally	Safe-haven rush drives prices higher
Oil:	Minimal impact	Slight uptick, no major volatility
Energy Stocks:	Outperformed	US energy companies led gains
Broader Equities:	Resilient	No risk-off characteristics observed

"Gold reacted as one would expect. A safe-haven rush into gold led to a big increase in the price of gold today, and it continues to be on a solid upward bullish trend," Yardeni noted. Energy stocks, particularly large US energy companies, outperformed as investors anticipated potential business opportunities in Venezuela's vast oil reserves.

Geopolitical Implications and Risks

While markets have remained calm, Yardeni cautioned that Washington's renewed assertion of influence in the Western Hemisphere could trigger unintended consequences elsewhere. The revival of Monroe Doctrine principles may embolden other global powers to assert their own spheres of influence.

"It will be interesting to see, now that the United States has declared that the Monroe Doctrine is back and that the Western Hemisphere is our sphere of influence. What is to keep the Chinese from saying that, if that is the case, they need to move on Taiwan?" Yardeni warned, highlighting potential escalation risks in other regions.

Commodity Outlook and Economic Resilience

Yardeni noted that commodity markets have shown mixed signals, with muted reactions reflecting uncertainty rather than complacency. He emphasized that fears around US trade tariffs have proven overstated, with both global and US economies demonstrating remarkable resilience.

Commodity:	Outlook	Key Factors
Oil (Brent):	Potential decline to $50	Supply exceeding demand, OPEC production
Precious Metals:	Continued strength	Late-year rallies in copper, nickel, tin
Energy Demand:	Flat trajectory	China's EV shift, diversified energy sources

For oil specifically, Yardeni expects downside pressure over the next three to six months, projecting Brent crude could fall from around $60 to $50 as supply continues to outpace demand.

India's Strategic Position

Yardeni believes India remains well-positioned after a period of consolidation, suggesting the country could benefit from the evolving geopolitical landscape through cheaper oil prices and improved trade positioning. "India consolidated last year after a huge run-up, and I think India will perform well this year, as it did prior to last year," he stated.

The potential for reduced dependence on Russian crude and strengthened negotiating position with the United States could provide India with significant strategic advantages, particularly if global oil prices decline as anticipated.

President Donald Trump is set to meet with energy executives at the White House within the next week as he seeks to enlist Western companies in rebuilding Venezuela's oil industry. The high-level discussions come just days after the US military operation that led to the capture of leader Nicolás Maduro, as the administration pursues an ambitious plan to revitalize the country's vast oil reserves.

White House Meeting Details and Key Participants

The parties have discussed a possible meeting Thursday or Friday that would include Trump, Energy Secretary Chris Wright and Interior Secretary Doug Burgum, according to sources familiar with the matter. The timing remains fluid, with Secretary of State Marco Rubio also potentially attending the sit-down that's being planned.

Meeting Details:	Information
Proposed Dates:	Thursday or Friday
Key Attendees:	Trump, Wright, Burgum
Potential Participant:	Secretary Marco Rubio
Status:	Timing remains fluid

Wright is separately expected to meet with executives from major oil companies during the Goldman Sachs Energy, Clean Tech & Utilities Conference on Wednesday in Miami. Summit attendees are set to include representatives from Chevron Corp., ConocoPhillips and other companies. Additionally, representatives from Spain's Repsol SA, which has operations in Venezuela but lost its US license to export oil from the country last year, are also slated to meet with Trump administration officials this week.

Strategic Goals and Financial Framework

The conversations reflect Trump's eagerness to secure Venezuela's mammoth oil reserves as a potential source of revenue and an opportunity to expand US energy dominance. Trump previously suggested the project could be "up and running" in less than 18 months, proposing that oil companies spend the money while the US provides reimbursement through revenue or direct funding.

Trump's Framework:	Details
Timeline Goal:	Less than 18 months
Funding Method:	Companies invest, US reimburses
Strategic Objective:	Energy dominance, lower oil prices
Revenue Potential:	Venezuela's mammoth oil reserves

"Having a Venezuela that's an oil producer is good for the United States because it keeps the price of oil down," Trump previously stated, emphasizing the broader economic benefits of expanded Venezuelan energy production.

Industry Challenges and Investment Reality

Venezuela currently produces about 1.00 million barrels per day of oil — far from its heyday. Just sustaining current production would require $53.00 billion of investment over the next 15 years, according to Rystad Energy analysts. Energy experts estimate that full rebuilding could be a decade-long process costing upwards of $100.00 billion.

Investment Requirements:	Volume
Current Production:	1.00 million barrels/day
Sustaining Investment:	$53.00 billion over 15 years
Full Rebuild Estimate:	$100.00+ billion
Expert Timeline:	Decade-long process

Firms that sign up for Trump's rebuild would need to help revitalize pipelines, pump stations and processing facilities that make up Venezuela's aging, decrepit oil infrastructure. Years of corruption, underinvestment, fires and thefts have left the country's crude facilities in tatters.

Industry Concerns and Political Risks

Some oil companies are wary of pouring tens of billions of dollars into the country over the next decade. Executives are looking for guarantees of physical and financial security amid festering concerns about the stability of a post-Maduro government. Exxon Mobil Corp. and ConocoPhillips previously operated inside Venezuela, but left after their assets were nationalized by Maduro's predecessor, Hugo Chávez, in the mid-2000s.

Company Positions:	Status
Chevron Corp.:	Currently operates under US license
Exxon Mobil:	Left after asset nationalization
ConocoPhillips:	Left after asset nationalization
Industry Concerns:	Political stability, asset security

Some oil company representatives have expressed concern about industry-wide meetings limiting their ability to speak candidly without running afoul of US antitrust law. In the current environment, a gathering also could be seen as an endorsement of Trump's plans to use Western oil companies to rebuild the Venezuelan oil sector. Industry representatives have indicated they would need additional assurances about political stability within Venezuela and the safety of their personnel and assets, with potential incentives under discussion.