Over the weekend, the United States removed Venezuela’s long-standing political leader, abruptly reopening questions investors have not seriously asked in years. Chief among them: could Venezuela’s oil sector finally begin to recover, and if so, which companies stand to benefit? It’s an important question, because on paper Venezuela has the largest proven oil reserves of any country.
This analysis is not an endorsement or celebration of those events. It is a response to investor reality. When geopolitical shifts occur in a country with the world’s largest proven oil reserves, capital markets immediately begin assessing exposure, risk, and opportunity.
Venezuela’s oil industry did not collapse overnight, and it will not recover overnight either. To understand what might come next — and which companies are positioned to benefit if policy and sanctions shift — investors need to understand why Venezuela’s oil sector failed in the first place, and which parts of that failure are reversible.
This post originally appeared at Investing Daily.