Overnight trading saw a surprising surge in U.S. oil company stocks despite the U.S. invasion of Venezuela and the capture of Nicolás Maduro. Chevron led the charge, jumping 7.82% in premarket trading. Halliburton followed closely with an 8.45% increase, while ConocoPhillips rose 7.54% and ExxonMobil climbed 3.95%.

The price of Brent crude, the global benchmark for oil, actually fell nearly 2% as traders seemingly concluded that the Venezuelan situation would have limited short-term impact on global oil prices. This reaction was somewhat counterintuitive, given the potential for increased Venezuelan oil supply under a new regime, which would typically be expected to depress U.S. oil prices.

The market's muted response to the geopolitical events in Venezuela stems from the country's severely diminished oil production capacity. Despite holding approximately 17% of the world's oil reserves, Venezuela's output has plummeted by 75% between 2013 and 2020, according to the Financial Times. This decline is attributed to the nationalization of oil companies under successive Chavismo regimes, the expulsion of foreign drilling expertise, and a subsequent exodus of Venezuelan drilling specialists. Currently, Venezuela accounts for less than 1% of daily global oil supply.

The surge in U.S. oil company stocks suggests investors are betting on a potential long-term benefit. The assumption is that a stable, U.S.-aligned government in Venezuela could eventually revitalize the nation's oil industry, potentially opening up new opportunities for American companies to participate in the country's vast oil reserves. However, the timeline for such a recovery remains uncertain, and the extent to which U.S. companies will be involved will depend on the policies of Maduro's successor and the overall geopolitical landscape.