Venezuelan sovereign and state-linked debt — long considered near-worthless — has already rallied, reflecting expectations of restructuring and eventual normalisation. But Green warned that risks remain elevated. “Political stability is still being tested. Investor protection and contract enforceability will be decisive.”
He added that early positioning is likely to come from hedge funds, family offices and specialist investors, rather than pension funds or sovereign wealth funds constrained by risk mandates.
India: The problem of stranded investments
For India, the immediate oil market impact appears limited. “Indian refineries never fully depended on Venezuelan crude,” said PwC’s oil and gas sector expert Deepak Mahurkar. Sanctions had already reduced India’s exposure in recent years.
The larger concern lies with stranded investments. Indian firms, including ONGC Videsh, IOC and OIL, have stakes in projects in Venezuela such as San Cristóbal and Carabobo, with around $536 million in dividends since 2014, according to ONGC Videsh’s latest annual report.
“If sanctions are lifted and an investor-friendly regime emerges, there is potential for recovery,” Vashist said. “But geopolitics will matter as much as technical feasibility.”
The petrodollar question
Beyond supply and prices, Trump’s Venezuela move also revives the long-simmering petrodollar debate. Global oil trade is overwhelmingly conducted in US dollars, a system that underpins Washington’s financial power by reinforcing global demand for the dollar and enabling sanctions enforcement. Venezuela, particularly under Chávez and Maduro, had attempted to bypass this system by selling oil in euros and yuan, a move that further antagonised the US.
Energy analysts say a US-friendly regime in Caracas would likely pull Venezuelan oil back firmly into dollar-based trade. “If a US-aligned government comes in, oil trade will almost certainly revert to dollar-denominated transactions,” said Prashant Vashist of ICRA, noting that currency experimentation was never commercially scalable under sanctions. PwC’s Mahurkar added that Venezuela’s export volumes are currently “far too small to alter the dollar’s dominance”, but restoring dollar-based trade would strengthen Washington’s leverage over energy flows rather than weaken it.
For critics, this underscores how control over oil is inseparable from control over finance. Any US-led revival of Venezuelan production would not just be about barrels in the ground, but about reasserting dollar power in global energy markets — at a time when countries from China to the Gulf are cautiously exploring alternatives.
Climate, conflict & contested legitimacy
Critics argue the US move underscores the volatility and conflict inherent in fossil fuel dependence. “The direct targeting of the world’s largest proven oil reserves is a warning sign of how politically explosive oil interests can be,” said Julian Popov, former environment minister of Bulgaria.
Pauline Heinrichs of King’s College London noted that Europe’s reliance on imported fossil fuels has left it “powerless to the geopolitical games of authoritarians and would-be authoritarians”.
