Oil prices dropped more than 1% in early Asian trading on Monday following the arrest of Venezuelan President Nicolas Maduro during an American military operation, and amidst Washington's intention to exploit the country's vast crude oil reserves.
The introduction of larger quantities of Venezuelan oil into the market would raise concerns about an oversupply and further pressure oil prices, which have dropped in recent months.
In morning trading in Asia, Brent crude fell by 0.21% to $60.62 per barrel, while West Texas Intermediate dropped by 0.35% to $57.12.
American forces launched an attack on Caracas in the early hours of Saturday, bombing military targets and transferring Maduro and his wife to New York, where the Venezuelan president will face charges related to drug trafficking.
US President Donald Trump said the United States would now manage Venezuela and would send American companies to repair its severely deteriorated oil infrastructure.
After years of underinvestment and sanctions, Venezuela currently produces about a million barrels per day, down from about 3.5 million barrels per day in 1999.
However, analysts say that alongside other key issues regarding Venezuela's future, significantly increasing its oil production will not be easy or quick.
Giovanni Stonovo from the UBS Group told Agence France-Presse that "any rebound in production would require significant investment given the deteriorated infrastructure due to years of mismanagement and lack of investments."
