Speculative interest in Venezuela’s sovereign debt is surging on Wall Street as the U.S. government intensifies control over the nation’s oil exports. Investors are betting on a potential restructuring that could yield outsized returns, despite the country’s ongoing economic crisis.
- Venezuela’s 2023 Eurobond trades at 12 cents on the dollar
- Over $380 million in defaulted debt purchased by U.S. investors since October 2025
- U.S. crude imports from Venezuela projected to drop to under 50,000 bpd in 2026
- Venezuelan debt now represents 6% of emerging market high-yield bond holdings in U.S. funds
- Potential recovery rates in restructuring range from 40% to 80% for early investors
- U.S. sanctions under EO 13925 limit access to financial systems for oil trafficking entities
A wave of speculative activity is sweeping through U.S. financial markets as investors increasingly target Venezuela’s defaulted sovereign debt, driven by shifting geopolitical dynamics and tighter U.S. sanctions on the country’s oil infrastructure. The Treasury Department has expanded enforcement of sanctions under Executive Order 13925, which restricts access to U.S. financial systems for entities involved in Venezuelan oil trafficking, effectively consolidating Washington’s influence over regional energy flows. The most actively traded instrument is Venezuela’s 2023 Eurobond, which was originally issued at $2.5 billion but now trades at approximately 12 cents on the dollar, reflecting deep distress. Despite this, demand has surged, with institutional investors and hedge funds collectively purchasing over $380 million in the debt since October 2025. Analysts note that some funds are positioning for a potential sovereign debt restructuring that could deliver 40% to 80% recovery rates for early buyers, assuming political stability returns. The influx of capital has prompted a broader reassessment of risk in Latin American markets. Venezuelan debt now accounts for nearly 6% of all emerging market high-yield bonds held by U.S.-based funds, up from 1.8% a year ago. This shift reflects a broader trend of investors seeking asymmetric returns in distressed markets, particularly where state-controlled assets—such as oil and gas reserves—remain valuable despite systemic dysfunction. Market participants expect the U.S. to maintain pressure on Venezuela’s energy sector, with the Department of Energy projecting that U.S. crude imports from the country will fall below 50,000 barrels per day in 2026, down from 180,000 bpd in 2024. This tightening environment is fueling investor confidence in a future capital recovery event, even as inflation exceeds 500% and the currency continues to collapse.