Assessing the Geopolitical Risks and Opportunities in Latin American Energy Markets Amid Trump's Venezuela Gambit

The Trump administration's dramatic pivot in Venezuela's energy sector-marked by the 2026 arrest of President Nicolás Maduro and the subsequent U.S.-backed plan to revitalize Venezuela's oil infrastructure-has ignited a complex interplay of strategic energy security, market volatility, and geopolitical rivalry. This intervention, coupled with surging resource nationalism across Latin America, is reshaping investment landscapes and challenging traditional paradigms of capital allocation in the region.

Strategic Energy Security: A Double-Edged Sword

The U.S. strategy in Venezuela hinges on unlocking the country's vast oil reserves-estimated at 303 billion barrels-to bolster American energy security and counter China's growing influence in Latin American supply chains. By rolling back sanctions and authorizing the import of oil equipment, the Trump administration aims to restore Venezuela's production capacity, which has plummeted from a peak of 3.5 million barrels per day in the 1990s to less than 1 million barrels today due to mismanagement and underinvestment. However, experts caution that this ambition faces significant hurdles. Reviving production at scale requires $70–80 billion in infrastructure investments, years of operational rebuilding, and a stable political environment-conditions far from guaranteed in a nation still reeling from regime change.

The geopolitical ramifications are equally fraught. By controlling Venezuela's oil exports, the U.S. risks alienating traditional partners like China, which had previously secured discounted oil under the Maduro regime. This shift mirrors a broader 19th-century-style "sphere of influence" approach, raising questions about whether the U.S. can justify such intervention given its minimal dependence on Venezuela's current output.

Resource Nationalism: A Regional Trend with Global Implications

Beyond Venezuela, Latin America's energy markets are increasingly shaped by resource nationalism, as governments seek to assert control over critical minerals and oil assets. Chile's National Lithium Strategy, Bolivia's partnerships with Chinese firms under the Belt and Road Initiative, and Mexico's 2022 lithium nationalization exemplify this trend. These policies aim to capture greater value from natural resources but have also triggered a surge in Investor-State Dispute Settlement (ISDS) cases, with 34% of global disputes in 2025 concentrated in Latin America.

For foreign investors, the risks are clear. Regulatory unpredictability, expropriation threats, and social unrest-such as the protests in Argentina's Jujuy province over mining reforms-have raised the cost of capital and complicated long-term planning. Yet, these dynamics also create opportunities for domestic firms and aligned international partners. For instance, U.S. and Canadian companies are positioning themselves to navigate the evolving landscape, while Chinese firms leverage BRI financing to secure lithium and copper projects.

Market Volatility: Stocks, ETFs, and the Venezuela Factor

The U.S. intervention in Venezuela has already triggered sharp market reactions. In January 2026, shares of Chevron and Exxon Mobil surged by 6.4% and 3%, respectively, as investors speculated on potential infrastructure contracts and access to Venezuela's oil reserves. Chevron, with its historical ties to Venezuela's PDVSA, appears best positioned to benefit, though analysts warn that meaningful production gains may take years to materialize. Similarly, energy ETFs like the VanEck Oil Services ETF (OIH) and SPDR Gold Shares (GLD) saw increased trading volumes, reflecting both optimism about oil sector recovery and a flight to safe-haven assets amid geopolitical uncertainty.

However, volatility remains a key concern. The global oil market's oversupply and low prices-projected to persist into 2026-diminish incentives for U.S. and international firms to invest in Venezuela. Meanwhile, OPEC+ dynamics, including potential production cuts by Saudi Arabia and Russia, could further constrain Venezuela's ability to ramp up output.

Balancing Risks and Opportunities

For investors, the Venezuela gambit and broader resource nationalism trends present a paradox: high-risk, high-reward scenarios in a region of strategic importance. On one hand, U.S. involvement in Venezuela could stabilize a critical oil supplier and curb China's influence. On the other, the political fragility of the Maduro regime's successor, coupled with regional nationalism, introduces significant uncertainty.

Infrastructure equities tied to energy transition technologies-such as lithium and copper-offer another avenue. While Chile and Argentina's lithium reserves attract capital, the sector's success depends on navigating regulatory shifts and geopolitical tensions, particularly as the U.S. Inflation Reduction Act (IRA) restricts partnerships with Chinese-owned firms.

Conclusion

The Trump administration's Venezuela strategy and Latin America's resource nationalism are redefining the region's energy markets. While the U.S. seeks to secure its energy future and counter China's rise, investors must weigh the geopolitical risks against long-term opportunities in oil and critical minerals. For now, market volatility and regulatory unpredictability remain dominant themes, underscoring the need for agile, risk-conscious investment strategies in a rapidly evolving landscape.