Trump’s move into Venezuela is not just raising eyebrows amidst oil producers, particularly U.S. giant Chevron, but also debt investors.
Default-stricken government bonds surged today following the removal of former Venezuelan President: Nicolás Maduro.
U.S. Policy Forecasts
Bonds issued by the country’s government and state oil company, Petroleos de Venezuela known as PDVSA, appreciated as much as 8 cents on the dollar: equivalent to 20% in trading.
The value of the bonds appreciated throughout 2025, yet today’s uptick is unprecedented in Venezuelan history.
Investor Opportunities: Debt Restructuring
Monday’s moves pushed Venezuela’s 2031 bond to almost 40 cents on the dollar.
Venezuela’s government and its state oil company, PDVSA, defaulted on bonds with a face value of $60B.
Historically, these bonds traded at deep discounts, often below 30 cents, because of uncertainty around repayment and sanctions.
Yet total external debt, including other PDVSA obligations, bilateral loans, and arbitration awards accrue to $150-170B.
U.S. Oil Sector and Investment Interest
The U.S. government’s intervention has sparked notable interest from oil sector investors.
Former Chevron executive Ali Moshiri is reportedly seeking $2 billion for Venezuelan oil assets, anticipating renewed foreign investment if sanctions ease and production infrastructure is rebuilt according to Reuters.
Yet any sustained increase in Venezuela’s oil supply will require substantial investment and time, limiting any expectations of short-run oil
External Ripple Effects: Defence Equities
Trump’s move is also stirring much added fuel to defence equities.
Europe and the GCC’s defence market has boomed the past year, thanks to conflicts in Ukraine, Yemen, and Sudan coupled with defence nationalisation in the Gulf.
Gold and defence stocks saw a big jump on Monday. The pan-European STOXX 600 climbed as much as 0.6% whilst the defence index, SXPARO, rose 3.3% to a new high in three months.
Trump’s actions are likely to sustain demand for defence equities, temper oil prices further, whilst further accelerating divestment from the dollar as the global currency reserve for international institutions.
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