Venezuela's upheaval impacts the world: oil supply cuts, gold surges, 60/40 model collapses

January 3, 2026, early morning, the U.S. military successfully captured Venezuelan President Maduro in Operation “Southern Spear,” triggering the most intense geopolitical upheaval in Latin America since the U.S. invasion of Panama in 1989. This 30-minute targeted operation not only marks the return of Monroe Doctrine in a highly militarized form but also sets off a chain reaction across global oil markets, financial systems, and safe-haven asset allocations, with impacts expected to last throughout 2026.

Dual Contradictions in the Energy Supply Chain: Shortages and Surpluses Coexist

Venezuela holds the world’s largest proven oil reserves (about 30.3 billion barrels), but long-term sanctions and governance failures have rendered its oil industry effectively defunct. The crisis’s impact on energy markets exhibits the contradictory features of “short-term supply shock” and “long-term structural surplus.”

Since the maritime blockade launched in December 2025, Venezuela’s crude oil exports have been effectively cut off. Shipping tracking data shows that a large number of “shadow fleet” tankers are forced to remain in international waters or return mid-voyage, leading Bloomberg to estimate that approximately 300,000 to 500,000 barrels per day of crude oil supply have disappeared from the market in the short term. The key issue is that these are not light oils easily substitutable but heavy, high-sulfur crude (Merey 16), which relies heavily on complex refining processes and is a critical raw material for the world’s complex refineries.

Even more dangerous is the threat to the power grid. The Guri Dam supplies about 80% of Venezuela’s electricity. If it suffers cyberattacks or physical destruction during chaos, the consequences could be system-wide disaster. Venezuela’s oil upgrader facilities require large amounts of electricity to dilute heavy crude from Orinoco for transport. Power outages would cause the heavy oil in pipelines to solidify rapidly, leading to long-term or even irreversible shutdowns. The nationwide blackout in 2019 serves as a warning, and the risks in 2026 are evidently higher.

Major investment banks’ forecasts for oil prices in 2026 vary mainly due to differing assessments of demand decline and supply-side disruptions. The bearish camp believes that non-OPEC supply expansions (U.S., Guyana, Brazil) will structurally suppress prices, and even a complete cutoff from Venezuela would not reverse the trend. The neutral-to-bullish camp emphasizes that geopolitical risk premiums are hard to dissipate quickly, especially in the heavy crude segment, where substitution capacity is overestimated.

If a U.S.-supported transitional management framework can stabilize the situation, Venezuela’s oil industry has room for a technical rebound. Under optimistic scenarios of lifting sanctions, attracting foreign investment (notably Chevron and ExxonMobil returning), and infrastructure repair, production could rebound to 2.15 million barrels per day by 2027. U.S. Gulf Coast refineries are originally designed to process heavy crude, so the return of Venezuelan heavy oil would significantly reduce U.S. refining costs, which is also a potential economic calculation of the Trump administration.

Multiple Chain Reactions in the Financial System

Structural Restructuring of Sovereign Debt Markets: Venezuela owes over $150 billion in external debt, including sovereign bonds, PDVSA corporate debt, bilateral loans to China and Russia, and various arbitration claims. Maduro’s fall makes it possible to finally initiate the world’s most complex and long-delayed debt restructuring process.

Secondary Market Reactions and Recovery Rate Expectations: Before the operation, Venezuela’s defaulted bonds traded at only a few cents on the dollar. With regime change, markets expect the new government to seek debt restructuring supported by the IMF and U.S. Treasury, with a reasonable recovery rate around 45 cents.

Citgo Dispute: The biggest obstacle to debt restructuring is Citgo Petroleum Corp. (PDVSA’s U.S. refining subsidiary). Previously, creditors attempted to auction Citgo shares to settle debts, but the U.S. government may intervene to suspend the sale to protect the transitional government’s only foreign “cash cow.”

Odious Debt Controversy: If the new government declares some Maduro-era debts as “Odious Debt,” it could reduce repayment burdens but would trigger years of legal battles and potentially scare off future bond investors.

Structural Reassessment of Safe-Haven Assets: The Collapse of the 60/40 Model

In the face of geopolitical turmoil and concerns over dollar weaponization, global asset allocation logic is undergoing profound change. Morgan Stanley, in its 2026 outlook, proposes a disruptive recommendation: abandon the traditional 60/40 equity/bond model.

New Allocation Framework: 60% stocks / 20% bonds / 20% gold. The most revolutionary part is that, traditionally, institutional allocations to gold are only 0.5% to 2%.

Three Pillars of Gold Allocation Logic

Anti-Fragility: Gold is the only asset that does not depend on any sovereign credit; it requires no clearing system and has no counterparty default risk. When conflicts unfold through military and financial means simultaneously, its anti-fragility actually strengthens under pressure.

Real Hedge Against De-Dollarization: As the U.S. frequently links SWIFT sanctions, secondary sanctions, and military interventions, the security of sovereign reserves is no longer just an economic issue but a matter of national security. By 2025, gold reserves have surpassed the euro, becoming the second-largest official reserve asset globally.

Supply Mathematics Determines Price Elasticity: The total above-ground gold stock in circulation is about $17.8 trillion, with extremely slow annual new supply growth. If institutional investors truly increase gold allocations from 1-2% to nearly 20%, the scale would far exceed the market’s absorption capacity, triggering deep asset re-pricing.

Dual Attributes of the Cryptocurrency Market

Bitcoin demonstrates complex dual attributes during this crisis. In the short term, as U.S. stocks decline due to panic, capital flows partially into the crypto market, with Bitcoin seen as “digital gold” independent of traditional financial systems, especially among investors concerned about U.S. jurisdiction.

However, regulatory risks are rising simultaneously. The U.S. Treasury warns that cryptocurrencies could be used to evade sanctions. As Maduro’s government is accused of money laundering via cryptocurrencies (“Petro” legacy), the U.S. may tighten crackdowns on privacy coins (like Monero) and non-compliant exchanges.