Daily Instagraph: The new world order

First, let me wish you a happy New Year, with good health and much success in all your endeavours.

The year is hardly five days old and geopolitics is back at the center of market attention. From an investor perspective, it is worth remembering one simple fact: Venezuela sits on the world’s largest proven crude oil reserves—as shown in today’s chart.

A quick clarification on the scale: the bar chart is expressed in billion barrels (source: U.S. Energy Information Administration, data as of 2023). On that basis, Venezuela is shown at a little above 300 bn bbl, versus c. 270 bn bbl for Saudi Arabia and c. 210 bn bbl for Iran.

In the short run, the impact on the oil price should remain limited, as it would take years to renovate Venezuela’s oil infrastructure. The more immediate market implications are therefore likely to be second-order: U.S. oil companies with existing exposure and, more broadly, oil services companies if capex eventually resumes. In parallel, as geopolitical risk remains elevated, the defence sector should continue to benefit from solid structural demand as developed nations adapt to this environment.

The bigger unknown is the reaction function: it is not clear how China and Russia will respond, nor what other moves the Trump administration may consider after this initial success.