JPMorgan: Crude | Thoughts on a Post-Maduro Venezuela & APAC Energy
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JPMorgan analyzes the oil market implications following the US military operation that captured Venezuelan President Maduro, with the Trump administration pledging billions to repair oil infrastructure. Venezuela holds 17% of global proven oil reserves but produces less than 1% of global supply, approximately 950,000 b/d. Recent blockade-related disruptions have already reduced output by 25%, or 166,000 b/d. Historically, PDVSA interruptions could cut production by up to 50%, implying a 450,000 b/d impact. However, the market focuses on long-term bearish catalysts. The global crude market already faces a 1.4 million b/d surplus in 2026. Once political stability returns, licensing resumes, diluents flow back, and Chevron operates without restrictions, Venezuelan supply could rebound within months to 1.2 million b/d—adding 250,000 b/d—and reach 1.3-1.4 million b/d within two years. This incremental supply would exacerbate the existing surplus, capping upside while extending downside risks. In APAC energy equities, positioning sits at the 10th percentile over eight years. JPMorgan favors low-beta names: PetroChina-H (857 HK, Overweight) and CNOOC (883 HK, Overweight), driven by strong gas execution and high dividend yields. Conversely, high-beta names PTTEP (Underweight) and Woodside (Neutral, WDS) are designated as top sells due to high oil price correlation and uncertain production growth.