Venezuela's Political and Economic Turbulence and Its Impact on Commodity Markets

The geopolitical landscape in 2025 was marked by a seismic shift in Venezuela, where U.S. military intervention in early 2026 led to the removal of President Nicolás Maduro and his wife, Cilia Flores, who now face criminal charges in the U.S. This abrupt political upheaval has not only destabilized Venezuela's domestic governance but also introduced a new layer of geopolitical risk that reverberates across global commodity markets. For investors, the interplay between Venezuela's turmoil and its implications for gold and energy investments reveals a critical, yet often overlooked, catalyst for portfolio strategy.

Geopolitical Risk and the Gold Rally

The U.S. capture of Maduro and the subsequent declaration of intent to control Venezuela's resources have amplified global uncertainty, reinforcing gold's role as a safe-haven asset. On January 5, 2026, spot gold surged nearly 3% to $4,455.42 per ounce, while silver experienced a more pronounced rally of up to 7.95%, reaching $77 per ounce. Analysts attribute this to immediate safe-haven demand as investors reacted to Latin American instability and broader geopolitical tensions, including potential implications for U.S.-China and U.S.-Russia relations.

Gold's performance in 2025, which saw a 67% gain, reflects a broader pattern of institutional and retail investment driven by geopolitical uncertainty, monetary policy shifts, and central bank buying. Central banks, in particular, have treated gold as a strategic tool for diversifying reserves and hedging against currency devaluation risks during periods of political instability. Morgan Stanley projects gold prices could reach $4,800 per ounce by the end of 2026, driven by expectations of continued U.S. Federal Reserve rate cuts and geopolitical risks.

Energy Market Implications: Short-Term Disruptions and Long-Term Reconfiguration

While the immediate impact of Venezuela's political instability on oil prices has been muted-due to an already oversupplied global market-the long-term implications are profound. Venezuela's oil production, which has declined from a historical peak of 3.45 million barrels per day in 1998 to less than 1 million bpd today, requires $70–80 billion in investment to restore output. U.S. oil majors like Chevron have seen stock price surges amid expectations of expanded operations in Venezuela, while U.S. Gulf Coast refiners are poised to benefit from renewed access to heavy crude.

However, this potential resurgence in Venezuelan oil supply could slow the global energy transition by reducing the economic incentive to shift toward renewables. Canadian heavy oil producers, meanwhile, face increased competition from Venezuela's heavy crude, which could displace their exports. The U.S. involvement in Venezuela's oil sector also raises concerns about resource nationalism, a strategy that could extend to other strategic resource locations, further complicating global energy dynamics.

Broader Geopolitical and Economic Implications

Venezuela's sovereign debt situation adds another layer of complexity. With $60 billion in defaulted bonds and total external obligations of $150–170 billion, the country's debt restructuring prospects hinge on political stability. A credible political transition could restore institutional confidence and unlock foreign investment, but the path remains fraught with uncertainty.

For investors, the Venezuela case underscores the importance of integrating geopolitical risk into commodity strategies. Gold's resilience and energy markets' reconfiguration highlight the need for diversified portfolios that account for both immediate volatility and long-term structural shifts. As geopolitical flashpoints multiply, commodities will increasingly serve as both a barometer and a buffer for global economic uncertainty.