U.S. Economic Risks from Venezuela Capture: Oil Prices in Focus

Following the capture of Venezuela's leader by the U.S., potential economic risks are centered on oil price fluctuations. Federal Reserve President Neel Kashkari highlights that, contrary to past geopolitical events like Russia's invasion of Ukraine, no significant impact on oil markets has been observed yet.

In a surprising geopolitical move over the weekend, U.S. special forces captured Venezuela's long-time leader, Nicolas Maduro, escalating tensions and drawing global attention.

Amidst the unfolding developments, Minneapolis Federal Reserve President Neel Kashkari pointed to oil prices as the primary economic risk to the U.S. economy. He noted that while previous geopolitical conflicts led to substantial impacts, such as the commodity shockwave from Russia's invasion of Ukraine, comparable effects seem absent from the U.S. action.

Oil markets showed only a muted response, with U.S. light sweet crude rising just 1%. Kashkari emphasized that while potential risks linger, the immediate economic impact remains limited. Meanwhile, markets await further developments as Maduro faces trafficking charges in New York, marking a historic intervention in Latin America.

(With inputs from agencies.)