Assessing Venezuela’s Energy Comeback: Real Opportunities, Lingering Uncertainties
Recent developments in Venezuela have reopened a conversation many investors had quietly archived under “not in this lifetime.” What changed was not sentiment—it was force. The U.S.-led military Operation Absolute Resolve that removed Nicolás Maduro was not a symbolic gesture or a diplomatic feint; it was a deliberate assertion that failed states sitting atop strategic resources no longer get infinite extensions.
Decisive action, executed through overwhelming military superiority, reset a geopolitical stalemate that diplomacy had frozen for twenty years. For the first time in decades, there is a non-zero chance that one of the world’s largest holders of proven oil reserves could begin a cautious, halting reappearance on the global capital markets stage.
That said, military success does not instantly translate into investability. Political motion and capital protection are still separated by a long, potholed road.
From our perspective, Venezuela now presents a deeply asymmetric setup: vast theoretical upside unlocked by regime change, paired with equally vast institutional repair still ahead.
Opportunities exist because power has shifted—but they are neither inexpensive nor immediate. Looking at 2026 and beyond, three areas will be most critical for assessing exposure.
1. Energy: Strength Created Access, Law Must Create Capital
Talks with U.S. policymakers and energy leaders leave no doubt: Venezuela’s resources were not the problem — accessing them was, because political control, legal uncertainty, and operational risk have long deterred meaningful engagement.
The military operation decisively removed the single largest obstacle to re-entry: an openly hostile, expropriatory regime aligned against U.S. interests. That matters. It signals credibility, deterrence, and—crucially—enforcement capacity. Investors notice when red lines are actually enforced.
However, executives from major international oil companies remain consistent on the next hurdle. Fiscal terms are still punitive, with effective government take near 60%, and there is no fully rebuilt legal framework that would prevent future expropriation or retroactive rule changes. Capital applauds strength, but it allocates to rules.
The presence of U.S.-backed technical assessment teams on the ground should be read correctly: this is reconnaissance under protection, not blind optimism. Until hydrocarbon laws are rewritten and investment protections are enforceable in practice—not just announced—large integrated producers will remain strategically interested and financially restrained.
2. Sovereign & PDVSA Debt: Trump Cleared the Field, Process Comes Next
Venezuelan sovereign and PDVSA bonds have rallied sharply as markets price in regime change and U.S. sponsorship of the transition. The rally is understandable—but it is getting ahead of sequencing.
Signals from Washington suggest little appetite to prioritize legacy creditors over national stabilization. That aligns with Trump’s broader posture: fix the state first, negotiate later. A transitional government will focus on humanitarian relief, grid repair, and institutional triage before rewarding financial claims tied to the old regime.
In that context, we view the debt complex as a volatility instrument, not a clean recovery trade, until a formal, U.S.-backed restructuring framework is established. The military operation created leverage; it did not create a term sheet.
3. Macro & Commodities: Where the Real Trump Dividend Shows Up
In the near term, Venezuela’s production base is too degraded to move global oil prices. The real optionality sits downstream and closer to home.
U.S. Gulf Coast refineries were engineered for Venezuelan heavy crude. Any normalization of flows—enabled by security guarantees and U.S. oversight—could materially improve regional refining margins. This is a direct, tangible benefit to U.S. energy infrastructure, not a theoretical global supply story.
At the macro level, the operation reinforces a broader theme: geopolitical fragmentation now includes active enforcement. That strengthens our constructive long-term view on gold as a hedge against policy shocks, rebuilding cycles, and the reality that order is increasingly maintained by power, not process. Markets price uncertainty quickly. They price strength slowly.
Risk Still Dominates the Equation—But in theory there is a path forward
The largest unresolved variable remains institutional control. While the military operation dismantled the Maduro regime, legacy power structures remain embedded across ministries and state enterprises. Compliance risk has declined, not disappeared.
In this environment, partner selection, governance, and legal clarity will matter more than speed. Trump’s intervention removed the existential risk. The next phase is about not reintroducing self-inflicted ones. First movers without protections still tend to become case studies.
Our Current View
Equities: Favor U.S.-based oilfield services firms positioned to support early rehabilitation, security-backed assessments, and infrastructure restart work.
Fixed Income: Neutral until a transparent, U.S.-endorsed, rules-based debt reform process is formally launched.
Direct Investment: Continue to monitor the supermajors. Technical assessments under military protection are signals to watch, not yet to allocate against.
Bottom Line
Venezuela is not a short-term recovery story. It is a long-horizon opportunity unlocked by decisive U.S. action, but whose monetization still depends on law, contracts, and enforcement.
Trump proved something markets had begun to doubt: regime risk can be resolved, not managed indefinitely. The key inflection point isn’t political; it lies in legal clarity.
Our view is the rational approach remains: liquidity, discipline, hedging confirmed by real strength.
Henry Murphy | Chief Strategist
