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Brent crude (BZ=F) futures retreated 1.4% to $59.88 a barrel, while West Texas Intermediate (CL=F) fell 1.5% to $56.43 at the time of writing.

Venezuela accounts for less than 1% of global oil (BZ=F, CL=F) output, with exports constrained by US sanctions and a naval blockade. However, the country holds about 17% of the world’s proven crude reserves, according to the US Energy Information Administration, giving it the potential to raise supply if production and exports recover.

Traders are now assessing how the US intervention could affect oil (BZ=F, CL=F) markets, at a time when analysts are warning of an approaching glut of crude.

Stephen Innes of SPI Asset Management said: “Oil (BZ=F, CL=F) prices steadied after an early wobble as traders weighed two opposing forces triggered by Washington’s move in Venezuela."

“On one hand, geopolitical instability in Latin America argues for a risk premium. On the other, the prospect of Venezuela’s vast reserves eventually returning to market argues the opposite.”

Jim Reid, an analyst at Deutsche Bank, said there is a debate “about the extent to which any short-term oil (BZ=F, CL=F) supply disruption from the upheaval will end up being outweighed by a longer-term supply boost from higher Venezuelan production”.

He added: “The prospect of a long-term supply recovery would serve to lower oil (BZ=F, CL=F) prices, and Trump himself said over the weekend that US oil companies would ‘go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country’.”