GM. This is Milk Road Macro, the newsletter that hits harder than Delta Force at 3am.
Here’s what we’ve got for you today:
- ✍️ Everything you need to know about the snatching of Maduro and oil.
- 🎙️ The Milk Road Macro Show: How Grift, Fraud, and Debt Are Creating The Biggest Housing Crisis of All Time w/ Melody Wright.
- 🍪 U.S. manufacturing ended 2025 at a 1+ year low.
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Prices as of 10:00 AM ET.
EVERYTHING YOU NEED TO KNOW ABOUT THE SNATCHING OF MADURO AND OIL
The U.S. has captured Venezuelan President Nicolas Maduro.
In an extraordinary operation, the South American leader was snatched from his bedroom by the U.S. military.
And he’s now standing trial for narco-terrorism in New York (he pleads not guilty).
But it’s oil that is the big story here.
U.S. President Trump has vowed to move American energy firms into Venezuela.
He says this can generate “a tremendous amount of wealth”.
So, what happened in Venezuela?
What will happen next?
Is it all about oil?
And what does it all mean for markets?
Let’s take a look…
So, what happened in Venezuela?
The U.S. had been building up military resources around Venezuela in recent weeks as tensions between the two nations ramped up.
Then, U.S. commandos swooped in under cover of darkness and it took less than three hours to capture Maduro in a lightning-fast, surgically clinical operation.
More than 150 U.S. aircraft swept into the country after Venezuela’s air defenses were neutralized, with an Army Delta Force unit delivered to the military base where Maduro was spending the night.
They broke through the steel doors and grabbed him and his wife before the couple was able to get to a safe room.
According to the Wall Street Journal, the U.S. had “an asset in Maduro’s inner circle” who helped intelligence services track the Venezuelan leader.
Delta Force operators also conducted detailed rehearsals on a full-scale replica of the Presidential compound at a classified location, according to reports.
The New York Times reports that it was Maduro’s “regular public dancing and displays of nonchalance that helped persuade some on the Trump team that he was mocking them and trying to call what he believed to be a bluff”.
What will happen next?
Shortly after the capture, Trump said the U.S. plans to “run” Venezuela, adding that America would have a “presence in Venezuela as it pertains to oil”.
“We’re going to have our very large oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country”, Trump said.
Asked why the U.S. needs Venezuelan oil, Secretary of State Marco Rubio said: “Why does China need their oil? Russia? Iran? This is the West. This is where we live”.
Russia, China, and Iran must “get out”, Rubio said - because the Western Hemisphere “is ours”, and nobody from “outside our hemisphere” is allowed in America’s backyard.
Since the capture of Maduro, the Venezuelan Government has regrouped, with former Vice President Delcy Rodríguez sworn in as Acting President.
Trump said: “If she [Rodriguez] doesn’t do what’s right, she is going to pay a very big price, probably bigger than Maduro”.
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EVERYTHING YOU NEED TO KNOW ABOUT THE SNATCHING OF MADURO AND OIL (P2)
Is this all about oil?
Getting oil prices down is a key pillar of the Trump administration’s long-term strategy.
Lower oil prices often lead to lower overall inflation.
Crude oil is heavily tied to U.S. CPI, because it's a big business input cost for shipping, transport and production.
In the current context, lower inflation may also pave the way for further rate cuts from the Federal Reserve.
And this is where Venezuela gets interesting.
Venezuela allegedly holds the world’s largest proven oil reserves (about one fifth of global reserves).
However, after more than two decades under the leadership of successive socialist dictators, Venezuela currently pumps only one million barrels of oil a day.
That’s roughly a third of what it produced at the turn of the century, and less than 1% of global supplies.
Because Venezuela has been heavily sanctioned in recent years, a lot of those barrels have flowed to China at steep discounts.
Venezuela has also cut strategic deals with Russia and Iran for weapons and influence.
According to Bloomberg, “getting back to 2 million barrels a day or higher would require massive reforms”.
Big oil projects are a long cycle - these things take years, not months.
This is not “another million barrels tomorrow”.
And it’s the type of oil that is also important - Venezuelan oil is not what you might call “top class”.
Venezuela’s oil is largely ultra-heavy, extremely viscous and “gloopy”, requiring complex processing.
According to commodities expert Morgan Downey:
“It's not Light Sweet Crude; it's road pavement that hasn't dried yet. Chemistry is a wonderful thing, and the industry can turn this sludge into jet fuel, but it costs a fortune.”
What does it mean for markets?
Some people expected that the weekend events would spark a big slide in oil prices due to anticipation of higher supply.
But this wasn’t the case.
WTI crude oil did initially move lower when trading opened after the weekend.
But then it moved higher again and is currently trading more than 1% above where it was on Friday.
The oil market has shrugged its shoulders.
Markets have judged that the capture of Maduro won’t materially disrupt global supply.
It’s unlikely that events in Venezuela will significantly impact the price of oil for potentially years to come.
In fact, according to 3Fourteen Research, positioning in oil is very crowded to the short side as traders bet on more downside.
Even before the Venezuelan events, oil shorts were at the most crowded level for two decades.
This could be a contrarian signal - and crude oil could be set to reverse higher with positioning currently this crowded to the short side, despite the Venezuelan developments.
However, the U.S. “controlling” Venezuelan oil may spark headwinds for crude oil looking ahead longer-term.
Top commodity traders at Goldman Sachs said they expected “potentially higher long-run Venezuela production increases the downside risks to the oil price for 2027 and beyond”.
They wrote:
“Goldman believes that any recovery in production would likely be gradual and partial as the infrastructure is degraded and would require strong incentives for substantial upstream investment.”
There were big market moves elsewhere, however.
Shares of U.S. oil companies pushed strongly higher.
Chevron (+5%), ConocoPhillips (+3%) and ExxonMobil (+2%) shot up.
According to the Financial Times, former top Chevron executive Ali Moshiri is already raising $2bn for Venezuelan oil projects.
Moshiri said: “Interest in Venezuela has gone from 0 to 99%.
Wrapping up
It was an extraordinary U.S military operation - capturing the President of a large country in almost no time at all.
Trump is eager to get U.S. companies back into Venezuela and get supply of oil from the South American country pumping higher.
But this is not a quick fix - and there is a lot of work to do and a lot of money to spend.
The events have seemingly had almost no impact on crude oil prices.
But U.S. involvement in Venezuela may well put more downside pressure on oil prices over the longer-term.
That’s it for this edition - catch you in the next one.
DON’T FALL FOR THE “COOLING” NARRATIVE 🧨
In today’s episode, we sat down with Melody Wright, to talk about how grift, fraud, and debt are warping the U.S. housing market into what she sees as the biggest housing crisis of all time.
Take a look at what surprised us:
- Why this is not a normal housing cycle, and why demand is not slowing, it is gone.
- What is really behind frozen home sales, from 3% mortgage lock in to exploding carrying costs like insurance and taxes.
- The big lie about a housing shortage, and what the data suggests about vacancy, overbuild, and investor owned homes.
- The macro signal Melody is watching next, and why she flags FHA delinquencies and foreclosures as a Q2 2026 inflection point.
Don’t sleep on this one 👇
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BITE-SIZED COOKIES FOR THE ROAD 🍪
The U.S. manufacturing sector ended 2025 at its weakest in more than a year, according to the ISM PMI. The monthly business survey revealed that “morale is very low across manufacturing in general”.
AMD revealed new AI chips as it battles with fellow chipmaker Nvidia. CEO Lisa Su said AMD’s new Helios system was “the world’s best AI rack” - a direct shot at Nvidia.
Meanwhile, Nvidia announced the launch of its next-gen Vera Rubin “superchip”. “Rubin arrives at exactly the right moment, as AI computing demand for both training and inference is going through the roof”, CEO Jensen Huang said.
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