Could Venezuela’s Future Spark a Currency Rebound?

Venezuela sits on the largest proven oil reserves in the world, is increasingly tied to China and Iran, and is locked in a prolonged political and economic crisis. For some investors, that combination raises the question: could regime change and a future currency adjustment eventually create a “currency profit” opportunity—the way some people dream about with Iraq or Argentina?

Below is a factual, sourced overview of the situation, plus a sober look at what would need to happen before any realistic currency-gain scenario could exist.

⚠️ Important: Nothing here is investment, legal, or sanctions advice. Venezuela is a sanctioned, high-risk environment. Any involvement with Venezuelan assets must follow your country’s laws and sanctions rules.

 

1. Venezuela’s vast oil reserves

Size and global ranking

Venezuela’s oil endowment is not hype—it is documented:

• The BP Statistical Review of World Energy and other datasets estimate Venezuela’s proved oil reserves at about 303 billion barrels, slightly more than Saudi Arabia. (Wikipedia)

• Worldometer’s compilation of reserve data shows Venezuela holding roughly 300 billion barrels, about 18% of global proved reserves, ranking #1 in the world. (Worldometer)

Most of these reserves are in the Orinoco Belt, a massive heavy-oil and extra-heavy-oil formation that is technically challenging and expensive to produce.

A recent analysis notes that although Venezuela has the world’s largest reserves, it does not earn proportionate revenue from exports due to years of under-investment, mismanagement, and sanctions that limit market access. (Al Jazeera)

Production vs. potential

• Before the crisis, Venezuela produced 2–3 million barrels per day (mbpd).

• Because of sanctions, deteriorated infrastructure, and loss of skilled personnel, production has fallen sharply and fluctuates widely; even optimistic scenarios today are well below historical highs. (Al Jazeera)

In other words, the geological potential is huge, but the economic and political system needed to convert that into stable export income is badly damaged.

2. Venezuela’s strategic ties with China

Oil-backed loans and investments

China has become one of Venezuela’s most important financial partners:

• Analysts estimate that China has financed more than US$60 billion in projects in Venezuela, mainly through oil-backed loans and infrastructure investment. (hsfkramer.com)

• Much of this engagement is linked to China’s Belt and Road Initiative (BRI) and has aimed to boost Venezuelan oil production while securing a long-term supply for Chinese refiners. (thegeopolitics.com)

2024 Bilateral Investment Treaty (BIT)

In 2024, Venezuela ratified a new bilateral investment treaty (BIT) with China:

• The treaty, signed in May 2024, is intended to protect Chinese investments and deepen cooperation in industrialization and economic diversification. (hsfkramer.com)

• This signals Beijing’s expectation of continued long-term engagement, regardless of which political faction is in power.

From a macro view, China is not only a lender but also a strategic stakeholder, with strong incentives to ensure continuity of oil flows and contractual stability over time.

3. Venezuela’s partnership with Iran

Energy and sanctions cooperation

Iran and Venezuela—both heavily sanctioned—have tightened ties, especially in the energy sector:

• Reuters’ review of PDVSA (Venezuela’s state oil company) documents shows Iran supplied an average of about 41,300 barrels per day (bpd) of crude and condensate to Venezuela between 2022–2023, while Venezuela shipped roughly 39,400 bpd of crude and fuel to Iran in return. (Reuters)

• This cooperation has focused on fuel swaps, refinery repairs, and shipping arrangements that help both countries bypass some effects of Western sanctions.

Toward a free trade agreement

In 2025, reports indicated that Iran and Venezuela are close to finalizing a free trade agreement:

• The agreement would eliminate tariffs on raw materials and other goods between the two nations, deepening trade and strategic alignment. (guacamayave.com)

Meanwhile, the United States continues to sanction entities involved in trading Iranian petroleum and petrochemicals, underscoring the legal and financial risks around this axis. (State Department)

4. Political outlook and the question of regime change

Current regime and disputed elections

Venezuela has been under President Nicolás Maduro since 2013, following the death of Hugo Chávez. International sources describe the system as increasingly authoritarian:

• A U.S. Congressional Research Service brief notes that the 2018 and 2024 presidential elections were widely considered fraudulent by international observers and the U.S. government. (Congress.gov)

• In July 2024 elections, both Maduro and opposition candidate Edmundo González Urrutia claimed victory, leading to severe political crisis and new sanctions. Several Western governments—including the United States—have referred to González as “president-elect,” challenging Maduro’s legitimacy. (The Guardian)

Sanctions and external pressure

Following the disputed elections and continued repression:

• The U.S., EU, UK, Canada and others have imposed personal and sectoral sanctions on Venezuelan officials and on PDVSA (the state oil company). (Reuters)

• Sanctions were loosened slightly in 2023–2024 when Venezuela signed an electoral agreement with the opposition, but were re-tightened when promised democratic reforms did not materialize. (Reuters)

This combination of disputed political authority and sanctions has kept the risk of regime change on the table, whether via:

1. Negotiated transition (power-sharing or new elections under international supervision).

2. Internal fracture within the ruling coalition and security forces.

3. Slow erosion with the current regime staying in power but gradually adapting policies.

No major international institution is predicting imminent regime change with high confidence; the outlook is highly uncertain.

5. Venezuela’s currency story: from hyperinflation to “digital bolívar”

Hyperinflation and redenomination

Venezuela’s currency, the bolivar, has been one of the most extreme cases of monetary collapse in modern history:

• Continuous high inflation began in the early 1980s, but hyperinflation exploded after 2016, with inflation exceeding 1,000,000% in 2018. (Wikipedia)

• The government carried out multiple redenominations:

• 2008: Introduction of the bolívar fuerte (VEF), at a rate of 1 new to 1,000 old bolivars. 

• 2018: Introduction of the bolívar soberano (VES), deleting five zeroes. (Wikipedia)

• 2021: Introduction of the bolívar digital (VED), deleting six more zeroes (1 digital bolívar = 1,000,000 bolívares soberanos). (Keesing Platform

Each redenomination wiped out nominal zeros but did not solve underlying inflation or structural problems. By 2024, it had become common to quote prices in U.S. dollars (“REF”), even if payment is in bolívares at the day’s central bank rate. (Wikipedia)

Partial dollarization

Because of hyperinflation:

• Much of day-to-day trade—especially in urban areas—has informally dollarized, with dollars, euros, and even cryptocurrencies used alongside bolívares. (Wikipedia)

• This means any future “currency adjustment” must consider the fact that USD is already the de facto store of value for many Venezuelans.

6. Could a future regime change lead to a currency “profit situation”?

This is the speculative part. Historically, some investors have sought profits by buying deeply devalued currencies in the hope of a later revaluation—for example after IMF-backed stabilization, debt restructuring, or political transition.

For Venezuela, several conditions would typically have to line up before anything resembling a credible “currency profit” scenario exists:

6.1 Preconditions for a real re-rating of the currency

1. Legitimate, stable government

   • A broadly recognized government (either a revamped Maduro administration, a unity government, or a post-transition administration) with a clear mandate to reform institutions and negotiate with creditors and multilaterals.

2. Macro-economic stabilization program

   • An agreement with the IMF and other international lenders that tackles:

     • Fiscal deficits (cutting monetized spending).

     • Central bank independence.

     • Banking sector recapitalization.

     • A coherent exchange-rate regime (managed float, crawling peg, or formal dollarization).

3. Sanctions relief and renewed oil investment

   • A path for the lifting or easing of U.S. and EU oil sanctions, enabling:

     • Major Western and Asian firms (including Chinese companies already present) to invest in oil fields, upgraders, and infrastructure.

     • Higher, more stable oil export volumes and access to broader markets. (Al Jazeera)

4. Credible currency framework

   • Decisions on whether to:

     • Keep the bolívar but anchor it to a basket or the USD.

     • Formally dollarize (like Ecuador or Panama).

     • Launch a new currency with strict rules and limited issuance.

Only if these institutional and macro steps are taken would markets start to assign Venezuela a substantially better risk premium and a genuinely stronger domestic currency.

6.2 Why a “windfall revaluation” is far from guaranteed

Even if regime change occurs, several factors make a spectacular retail “currency profit” scenario unlikely and very risky:

• History of redenominations: Past reforms repeatedly wiped out nominal values without delivering durable appreciation. A future reform could do the same: delete more zeros, convert balances at an official rate, and heavily restrict conversion to hard currency. (Keesing Platform)

• Legal and regulatory risk: Governments can impose capital controls, freeze accounts, or convert foreign-held bolívares at unfavorable official rates, especially during transition.

• Sanctions and compliance: For U.S. and some other nationals, holding or trading Venezuelan securities or engaging with PDVSA can violate sanctions; penalties can be severe. (State Department)

• Dollarization path: If Venezuela ultimately formalizes what already happens on the street (broad USD use), the “profit” may accrue not to holders of bolívares, but to holders of U.S. dollars and to investors in productive assets (oil, infrastructure, telecom, etc.) once risk premiums fall.

6.3 Where genuine value might eventually emerge

Historically, countries with large resource bases and improved governance often see opportunity in:

• Sovereign and quasi-sovereign bonds after restructuring (highly technical, institutional investors usually dominate).

• Equity in energy and infrastructure companies once property rights, contracts, and sanctions risks are clearer.

• Real-economy investments (logistics, ports, agriculture) when macro rules stabilize.

But these are frontier-to-distressed-market plays, affected by politics, law, and global energy transitions—not simple currency-exchange bets.

7. Takeaways

1. Resource base: Venezuela has the largest proven oil reserves in the world, giving it enormous latent economic power if governance, investment, and sanctions issues are resolved. (Wikipedia)

2. Geopolitical ties: Deepening ties with China (loans, BIT, infrastructure) and Iran (energy cooperation, pending free trade agreement) help Caracas offset Western pressure but also complicate any future realignment. (hsfkramer.com)

3. Political risk: The political system is contested, with disputed elections, ongoing sanctions, and no clear, low-risk route to regime change. (Congress.gov)

4. Currency reality: The bolívar has been repeatedly destroyed by hyperinflation and redenominations, and daily life is informally dollarized. Any future “currency adjustment” will start from that reality, not from an untouched, undervalued national currency. (Wikipedia)

5. Speculation vs. facts: For now, a dramatic “currency profit” scenario is speculative and highly uncertain. Serious opportunities—if they emerge—would likely come only after credible political and macroeconomic stabilization, sanctions changes, and institutional reforms.

• Reuters

• AP News
• The Guardian
• New York Post
• Financial Times