Venezuela: Morgan Stanley and Wells Fargo Forecast Its Impact

Quick overview

After the U.S. intervention that led to Maduro’s capture, markets assess the impact on the energy sector.

The world is still digesting the U.S. military intervention in Venezuela, which ended with the capture of President Nicolás Maduro. Among the many consequences of this action is a significant shift in the energy sector, with both economic and geopolitical implications.

Venezuela holds the largest proven oil reserves in the world, meaning that U.S. involvement in its production could reshape global energy dynamics. Against this backdrop, Morgan Stanley and Wells Fargo—two of Wall Street’s leading investment banks—have outlined their views on the geopolitical outlook and the future of Venezuelan energy markets.

Venezuelan stocks, bonds, and oil

Morgan Stanley expects the U.S. intervention to primarily affect Venezuelan bonds (VENZ and PDVSA), forecasting price gains of up to five points “as markets price in a higher probability of debt restructuring and potentially higher recovery rates.” However, the bank anticipates stronger performance over time as spreads compress relative to sovereign benchmarks.

“The impact on oil prices is more nuanced: short-term risks of production disruptions are likely to be offset by the prospect of higher output in the medium term if political conditions stabilize. Gold prices also show an upward bias due to heightened geopolitical uncertainty,” Morgan Stanley noted in its latest client report.

The bank added that well rehabilitation efforts could significantly boost output, potentially restoring production to around 2 million barrels per day—levels last seen in the mid-2010s—within one to two years.

Wells Fargo, meanwhile, struck a more cautious tone. “We do not believe that the removal of Nicolás Maduro by the United States will act as a catalyst capable of destabilizing global or Latin American financial markets, nor oil prices,” the bank stated.

It also noted that Venezuelan sovereign and PDVSA debt have been among the best-performing assets since the Trump administration took office in January 2025, nearly doubling in value over the past 12 months. “While most emerging-market assets rallied last year, the degree of outperformance in Venezuelan assets reflects, in our view, growing market confidence in a potential regime-change scenario.”

Geopolitical realignment

On the geopolitical front, Wells Fargo highlighted that Latin America is already deeply divided between countries aligned with the United States and those closer to China, and that Washington’s role in Maduro’s removal is likely to exacerbate these fractures.

Current alignments include Argentina leaning toward the U.S. and Nicaragua toward China, but shifts may occur. Colombia and Brazil could move closer to China following tensions with Washington, while Chile may gravitate toward the U.S. after the election of José Antonio Kast as president.

In this context, Wells Fargo warned that “the global economy is likely to continue facing negative consequences stemming from fragmentation and bloc formation. The magnitude of the adverse impact will depend on which countries align with which blocs, but in aggregate, lower global GDP growth is the outcome of a fractured world economy.”

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Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.

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