What US intervention in Venezuela means for markets

Podcast: Why Ulrike Hoffmann-Burchardi is optimistic | Apple | Spotify (7 mins)
Video: Jump start your portfolio for 2026 (4 mins)
Podcast: Across the Pond: Themis Themistocleous discusses the bright outlook for the Eurozone in 2026 | Apple | Spotify (18 mins)
Video: Go for a run in Hong Kong with CIO's Adrian Zuercher and Jon Gordon (5 mins)
Video: Have you picked the right alts for 2026? CIO's Karim Cherif explains (6 mins)

The Trump administration carried out a mission on Saturday to oust Venezuelan President Nicolas Maduro, who was taken to the US to await trial. In a weekend press conference, President Trump said the US “will run the country until such time as we can do a safe, proper, and judicious transition” and suggested the US administration could partner with Vice President Delcy Rodriguez to “make Venezuela great again.” While criticizing the US action, Vice President Rodriguez, the new Venezuelan de-facto head, kept the door open to peaceful talks in a message addressed to both the US and the world, saying Sunday that "we invite the US government to collaborate with us on an agenda of cooperation oriented toward shared development within the framework of international law."

The move marked a forceful assertion of what the president has called the “Monroe Doctrine,” which claims US dominance in the Western Hemisphere. “We want to surround ourselves with good neighbors,” the president said. Following the mission targeting Maduro, Trump warned that further military action is possible if the interim Venezuelan government does not cooperate, and suggested similar operations could be considered in Colombia.

Commodities have moved the most to the geopolitical developments: Spot gold is up 2.3% to USD 4,427/oz at the time of writing, while Brent and WTI crude oil prices are down around 1% on the day.

But while the Trump administration’s action is a significant geopolitical step, we do not expect a major, enduring market impact, either through lower oil prices, emerging market bonds, or broader sentiment.

While the removal of the US embargo on Venezuelan oil and renewed investment could eventually lift production, this would be a challenging multi-year process. Venezuela’s energy infrastructure has suffered from several decades of underinvestment following the nationalization of the industry in 2000, which included taking control of assets from US firms such as ExxonMobil and ConocoPhillips. Oil output peaked at as much as 3.5 million barrels per day (mbpd) in the 1970s, when the country accounted for over 7% of global output. Production dropped below 2mbpd during the 2010s and averaged around 1.1mbpd last year, around 1% of worldwide output. In addition, President Trump has indicated that the oil embargo will remain in place for now, so we continue to see Venezuelan oil exports and production being disrupted.

Although Venezuela possesses significant oil reserves, any recovery in production would require substantial investment given the crumbling infrastructure resulting from years of mismanagement and underinvestment. It remains unclear which companies would be willing to invest in Venezuela at current oil prices, especially amid ongoing political, security, and legal uncertainties. Additionally, Venezuelan oil is primarily extra-heavy crude—highly viscous and with elevated sulfur and metals content—that makes it less valuable than sweet light crude.

Venezuelan assets are not a significant part of emerging market bond or equity indices. Global investors have long held a negative view on the nation’s outlook. Its sovereign debt has been in default for over eight years and trades independently to other emerging market sovereign debt. The nation’s sovereign bonds face the prospect of a complex sovereign debt restructuring, with over USD 100 billion in outstanding debt owed to a range of creditors, including obligations to allies such as China and Russia. Venezuelan equity markets are virtually nonexistent today, neither part of the emerging market nor frontier market equity universes.

Geopolitical crises typically have only a fleeting impact on financial markets, and we don’t expect this to be an exception. During the last 11 major geopolitical events, the S&P 500 was on average just 0.3% lower one week after the event and 7.7% higher 12 months later. Except for worries over tariffs, markets have barely reacted to even relatively major geopolitical developments, such as the US bombing of Iran. Instead, the focus of investors has been on news regarding AI, earnings, and Federal Reserve policy. We do not currently believe the political situation in Venezuela will be a significant source of concern for markets or a reason for optimism.

So, while developments in Venezuela may cause volatility, especially in oil markets, we expect the focus of investors to remain on fundamentals.

We forecast nearly 10% earnings growth for the MSCI All Country World for both 2026 and 2027, contributing to further stock gains this year. Against this backdrop, we rate global equities as Attractive. If investors are cur­rently underallocated, we believe they should reallocate excess cash, bond, or high yield credit holdings to stocks. Finally, we see gold as a universal portfolio hedge, with a target of USD 5,000/oz by mid-2026. For investors with an affinity to the metal, we recommend a mid-single digit percentage exposure as optimal within a portfolio context.

For more details, please see our recent Emerging Markets Weekly "Venezuela: Maduro is out, so what's next?" published 4 January 2026.