Episode summary
What Venezuela’s Regime Change Means for Oil | Prof G Markets
Prof G Markets
· · 33 min · Hosts: Ed Elson, Scott Galloway · Guests: Mark Zandi, Bob McNally
Summary
The first half of the show focused on the economy’s setup for 2026, with a guest arguing that growth will stay solid but not cleanly “strong.” He said 2025 came in close to forecast, especially on jobs, but that asset prices surprised to the upside. He also argued the latest CPI reading was distorted by the 2025 government shutdown, because missing October survey data were effectively filled in with no change, and he estimated underlying CPI inflation is still running at 3% year over year.
Looking ahead, the guest projected 2.5% GDP growth in 2026, driven mainly by fiscal stimulus from the One Big Beautiful Bill Act rather than the Fed. He said the tax cuts are deficit-financed, will lift business investment and household spending, and help keep unemployment around 4.6% while inflation stays near 3.1%. The result, in his view, is an economy that feels okay but remains a little too hot on deficits, inflation, and labor-market slack.
The second half turned to Venezuela after Maduro’s capture. A guest argued the near-term oil impact is limited because Venezuela still produces less than 1% of global supply, but its reserves are huge and technically difficult to develop. He said Venezuela’s oil is heavy and costly to process, that rebuilding output could take years and tens of billions of dollars, and that oil companies will move cautiously despite the market’s bullish reaction to Chevron, Exxon Mobil, and other U.S. energy names.
Key takeaways
- A guest said 2025 job growth was almost exactly in line with forecast, but asset prices ran hotter than expected.
- The guest argued November CPI was misleading because the government shutdown left October survey data missing and effectively imputed as no change.
- The guest forecast 2.5% GDP growth in 2026, with much of the lift coming from deficit-financed fiscal stimulus in the One Big Beautiful Bill Act.
- He expects unemployment to average 4.6% in 2026 and CPI inflation to average 3.1%, both still above the Fed’s comfort zone.
- A guest said Venezuela’s oil matters more for long-term supply than for the near term because output is under 1% of global supply and the crude is expensive to develop.
- He said oil companies will likely be cautious about committing billions to Venezuela because the investment horizon is decades, not a single administration.
Notable quotes
“it remains on consumer price inflation, CPI inflation at 3% year-over-year”
“that is going to lift growth by just about the difference in GDP in 26 compared to 2025, about four or five ten of a percent”
“Venezuela provides a little less than a million barrels a day. So, less than a percent of total world supply”
How the episode opens
Today's number, 303 billion. That's how many barrels of oil are sitting in Venezuela, more than any other nation in the world. That is $18 trillion worth of oil at current oil prices, roughly equal to the GDP of China.
However, none of this has anything to do with what happened this week. Welcome to Profy Markets. I'm Edson.
It is January 6th. Let's check in on yesterday's market vitals. The major indices climbed with the Dow closing at a record.
The price of oil rose on President Madura's capture in Venezuela. More on that later. Meanwhile, Treasury yields dropped and finally Bitcoin rallied above $94,000.
Okay, what else is happening? It is our first daily episode of the year and even though we took a holiday break, the market certainly did not. So, here to help us review what we missed at the end of the year and also discuss the outlook for 2026, we're speaking with Mark Zandandy, chief economist at Moody's Analytics.
Mark, welcome back to Property Markets and happy new year. Good to see you.
Happy New Year, Ed. Thanks for the opportunity. It's good to be with you. — Absolutely. You are our first guest back in the new year, which is a huge honor, as I'm sure you will know. — I I'm sure you say that to all the economists. So, but I'll take it. I'll take it.
So, we Well, first we should want to start with your scorecard for 2025. You basically add up all of the your your predictions from last year and compare it to what we actually saw. You pretty much nailed most of it. I'm just looking at the scorecard now. Uh job growth, GDP growth, um unemployment rate was pretty accurate. I mean generally um pretty accurate across the board I guess.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- venezuela oil
- regime change
- 2026 outlook
- energy markets
- oil supply risk
Companies and tickers mentioned
- MCO
- Moody’s Analytics
- Rapidan Energy Group
Watch the episode
Watch “What Venezuela’s Regime Change Means for Oil | Prof G Markets” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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