Venezuelan defaulted bonds jumped as much as 35% in a single day as traders rushed to price in regime change
Venezuela just went from “uninvestable” pariah to one of the riskiest high‑beta bets on the planet – and global money is already lining up.
US forces have captured former Venezuelan leader Nicolás Maduro, and US President Donald Trump is pitching Venezuela as a US$100bn oil and restructuring opportunity even as major oil CEOs and banks warn the country still fails basic rule‑of‑law tests, according to CNBC.
Venezuela sits on the world’s largest crude oil reserves, but output has collapsed to below 1m barrels a day from 3.75m barrels in 1974 after years of mismanagement and sanctions, Bloomberg reported.
Analysts at Rice University’s Baker Institute estimate the country needs roughly US$10bn a year for a decade to rebuild its oil infrastructure to former peak levels.
Trump has moved quickly to frame Maduro’s ouster as an economic opening.
Since the military raid, his administration has seized tankers carrying Venezuelan crude and says the US is taking over sales of 30m–50m barrels of previously sanctioned oil, with plans to control those flows indefinitely, according to AP News.
At the White House, he told oil executives that “giant oil companies will be spending at least US$100bn of their money” and promised security guarantees.
He also argued that if the US had not acted, “China or Russia would have done it.”
On the financial side, bondholders have already booked big paper gains.
In the weeks before Maduro’s capture, Citigroup analysts projected as much as 60 percent upside on Venezuelan bonds in a leadership change, Bloomberg reported.
As pressure mounted, traders piled in.
After the raid, defaulted Venezuelan and PDVSA bonds jumped as much as 35 percent in a single day, adding about US$4bn in mark‑to‑market gains and reviving hopes for a restructuring of roughly US$60bn of defaulted debt.
Major asset managers such as Fidelity, BlackRock and T. Rowe Price still hold chunks of that paper.
A bondholder committee formed after Venezuela’s 2017 default met to reassess recovery prospects and is considering proposals including a new instrument tied to oil revenues to bring more creditors into a deal.
Including past‑due interest, total claims approach US$100bn, according to a Barclays note cited by Bloomberg.
Lee Robinson, CIO of London‑based Altana Wealth, which runs a Venezuela‑focused hedge fund, said “the timeline’s gone from years to six months to start a restructuring process” and that “it’s all about the money.”
On the banking side, US engagement with Venezuela’s oil sector could reopen business in trade finance, infrastructure funding and restructuring.
JPMorgan looks especially well positioned given its 60‑year history in the country and prior role in international trade finance, Reuters reported.
The bank shut most local operations in 2002 but kept a dormant Caracas office that it could be reactivated.
One idea under discussion inside JPMorgan is a dedicated trade bank to finance oil exports, similar to the Trade Bank of Iraq it helped lead after 2003.
The bank could also deploy capital from its US$1.5tn, 10‑year Security and Resiliency Initiative into areas like critical minerals, where Venezuela has deep reserves.
Citigroup, which exited Venezuela in 2021 by selling its operations to Banco Nacional de Crédito, is the “dark horse” given its Latin American experience, Wells Fargo analyst Mike Mayo said.
Spanish lender BBVA is currently the only major foreign bank with a meaningful on‑the‑ground presence, and could benefit if energy and infrastructure deals move ahead, according to Reuters.
At the same time, Venezuela’s banking system is heavily regulated, isolated and reliant on offshore channels to move money, and even a sanctions rollback may not be enough to tempt all banks back.
María Paola Figueroa of the Institute of International Finance noted that after Iran sanctions were lifted in 2016, global banks still largely stayed away.
Despite the rhetoric, the biggest oil companies are not writing cheques yet.
ExxonMobil CEO Darren Woods told Trump that Venezuela is “uninvestable” under current legal and commercial frameworks after having assets seized twice, according to CNBC.
He said Exxon would send a technical team but stressed the need for “significant changes” to investment protections and hydrocarbon laws.
ConocoPhillips CEO Ryan Lance called for restructuring Venezuela’s debt and “the entire Venezuelan energy system including PDVSA.”
Trump responded that the US government would not revisit losses from the 2007 nationalization, telling Lance, “You’re going to make a lot of money, but we’re not going to go back.”
Chevron, the only US major still operating in Venezuela through joint ventures with PDVSA, struck a more optimistic tone.
Vice‑chair Mark Nelson said Chevron can double liftings from those ventures “essentially effective immediately” and boost production by about 50 percent within 18–24 months under existing plans, according to CNBC.
Energy Secretary Chris Wright said companies showed “tremendous interest” and estimated it could take eight to 12 years to lift daily production to 3m barrels, AP News reported.
US Treasury Secretary Scott Bessent suggested independents and “wildcatters” may move faster than listed majors, saying their phones were “ringing off the hook” with interest in Venezuela, CNBC reported.
Venezuela has been under US sanctions since 2006, which tightened in 2017 and expanded to broad oil sanctions in 2019, Reuters reported.
Washington now plans to selectively roll back some measures as it starts marketing Venezuelan crude, with proceeds flowing into US-controlled accounts at global banks, according to the US Department of Energy.
Deutsche Bank economists called Venezuela “a country with huge geopolitical and economic significance,” noting it represents only 0.1 percent of global GDP but holds outsized oil reserves.
Researchers at the Institute of International Finance warned that markets still face a binary question: whether this transition becomes a credible stabilisation and reform path that lifts production, or stalls amid political and institutional frictions, Bloomberg reported.
