Oil prices are edging higher after two days of declines as investors assess whether political developments in Venezuela could disrupt global supply. Analysts say the key issue is whether risks translate into physical changes to oil production and exports rather than headlines alone.
BNN Bloomberg spoke with Rob Thummel, senior portfolio manager at Tortoise Capital, about Venezuela’s production capacity, infrastructure risks and why oversupply continues to dominate oil pricing, alongside longer-term energy demand tied to power generation and artificial intelligence.
Key Takeaways
- Venezuela produces about one million barrels per day, accounting for less than one per cent of global oil supply and limiting its short-term pricing influence.
- Global oil prices remain under pressure from oversupply, and current events in Venezuela do not materially change physical supply conditions.
- Any near-term upside risk for oil prices would likely stem from infrastructure disruptions rather than political developments alone.
- Restoring Venezuela’s oil output to historical levels would require years of capital investment and repairs to aging fields and facilities.
- Rising electricity demand from AI is strengthening the long-term case for natural gas, which remains a low-cost and abundant fuel source in North America.
Read the full transcript below:
ROGER: Brent crude is up 59 cents, while West Texas Intermediate rose 58 cents today. That follows two days of declines as investors continue to monitor developments in Venezuela. For more, we’re joined by Rob Thummel, senior portfolio manager at Tortoise Capital. Rob, thanks for joining us.
ROB: Thanks for having me.
ROGER: Is this kind of a return to normal for oil after the shock of Sunday?
ROB: I think so. If you look at the fundamentals of oil — the physical fundamentals — they really haven’t changed. We still have an oversupplied global oil market, and as a result, we continue to see pressure on oil prices. You see that reflected in the futures curve as well.
We know what could send oil prices higher. A disruption to oil infrastructure would matter. Oil infrastructure is critically important, both in Canada and in the U.S. We don’t see that happening in Venezuela right now. But if Venezuelan oil were taken off the market, that would likely remove about one million barrels per day from supply, which would help balance the market more quickly.
On the other hand, we don’t believe Venezuela is suddenly going to flood the market with oil. It’s not realistic to think production will return to three million barrels per day, or anywhere close to past levels, because the oil fields and infrastructure require significant capital investment. That process would take years, not months or days, before Venezuela could become a more meaningful global oil producer again.
ROGER: In the short term, with the president saying the U.S. would take 30 to 50 million barrels from Venezuela for use in the U.S., what kind of impact could that have? Do we know how that oil would enter the system?
ROB: The only detail I’ve seen is that it would likely go into the Strategic Petroleum Reserve in south Texas. Some of that oil is already loaded onto vessels and ready to be transported, so it would probably end up back in the SPR.
As you know, the U.S. has been drawing down the Strategic Petroleum Reserve over the past couple of years, so this could help refill it. That heavy oil — similar to what Canada produces — is very important to the U.S. refining system and to U.S. energy security more broadly.
ROGER: What has the reaction been in Canada? There’s obviously a lot of oil flowing south. Are there concerns that oil could start coming up from the south instead of down from the north?
ROB: That’s a good question. You saw it reflected in stock reactions. Some Canadian energy infrastructure names, including pipeline companies, were down earlier this week. Some oilsands producers also pulled back on expectations of increased competition from heavy oil.
From our perspective, lower oil prices tend to support increased consumer demand, both domestically and globally. More heavy oil ultimately translates into lower gasoline prices in the U.S., which isn’t necessarily a bad thing. It’s probably a positive for consumers.
ROGER: Let’s turn to longer-term drivers. AI is becoming a major theme in the energy buildout.
ROB: From an AI perspective, we see a tremendous opportunity for natural gas. AI is driving a significant increase in electricity demand, and you need a reliable, low-cost fuel source to meet that demand. Natural gas is the answer.
The U.S. has abundant natural gas, and Canada does as well. That’s a major advantage because natural gas keeps electricity prices relatively low. From a global competitiveness standpoint, it helps the U.S. remain competitive in the AI race. Longer term, we’re very constructive on natural gas because of that demand growth.
ROGER: We’ve seen reports suggesting natural gas prices could rise this year.
ROB: They could, but weather remains the biggest variable. We don’t expect a substantial rise in natural gas prices unless there’s a major weather event, such as a polar vortex. There’s a lot of supply in North America, and that should help keep prices at reasonable levels.
ROGER: Beyond natural gas, where else do you see opportunities tied to power expansion?
ROB: Nuclear is one option. Pipelines are another. Pipelines are actually a compelling way to gain exposure to AI without paying the valuations associated with mega-cap tech stocks.
It may sound odd to connect pipelines and AI, but rising natural gas demand means higher volumes flowing through pipelines in both the U.S. and Canada. That supports dividend growth, share buybacks and stable cash flows. While growth rates may not match mega-cap tech, these are solid companies with attractive dividends and long-term demand tailwinds tied to AI.
ROGER: Can the system handle that level of growth?
ROB: Yes. Electricity demand is growing at roughly two to three per cent annually. That may sound modest, but compounded over time it’s significant. It requires a lot more electricity generation and, therefore, a lot more fuel.
On top of that, LNG exports from both the U.S. and Canada are expected to increase. Taken together, that puts natural gas in a very strong position for the next several years, if not decades, given its low cost and abundant supply in North America.
ROGER: Rob, we’ll leave it there. Thanks very much for joining us.
ROB: Thanks for having me.
ROGER: Rob Thummel, senior portfolio manager at Tortoise Capital.
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This BNN Bloomberg summary and transcript of the Jan. 8, 2026 interview with Rob Thummel are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
