Venezuela’s fragile rebound: early relief, persistent risks as oil and finance reopen
A new co-operation agenda with Washington has eased some oil and financial barriers. Early signs of relief clash with deep structural problems and the risk of runaway inflation.
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By Torontoer Staff
Venezuela’s economy is entering a volatile transition. The recent removal of Nicolás Maduro and a fresh co-operation agenda with the United States have opened pathways for renewed oil exports, tentative financial normalisation and renewed investor interest, but the gains so far are fragile and conditional.
Markets and some Venezuelans report early signs of relief: a falling dollar exchange rate in Caracas, record gains on the Caracas Stock Exchange and visits by Wall Street teams. Economists caution that any recovery will be slow, heavily dependent on oil, and vulnerable to political and logistical setbacks.
How much growth is possible, and why oil matters
Economists say Venezuela could post one of the region’s fastest growth rates if oil exports normalise and sanctions are lifted. Consultant Asdrúbal Oliveros estimates annual growth of 10 to 15 per cent under a robust oil recovery, with oil output potentially rising by about 30 per cent. Those gains would be driven largely by cash flows from crude sales, which finance imports and public services.
If there is a real recovery of the oil sector and sanctions are lifted, the economy could grow between 10 per cent and 15 per cent.
Asdrúbal Oliveros, economist
Oil executives are divided. Some companies, such as Chevron, have signalled interest in expanding operations. Others, including Exxon Mobil, still regard Venezuela as uninvestable because of legal uncertainty and stretched infrastructure. Production gains are likely to materialise over 12 to 24 months, not immediately.
Everyday life and early market movements
For ordinary Venezuelans, any easing of dollar shortages and an uptick in oil revenues would be tangible. Logistics workers and small traders have reported a drop in the informal dollar exchange rate and more activity in markets. The Caracas Stock Exchange saw record-breaking gains in recent days, driven by speculative flows and renewed investor curiosity.
At the start of January, the dollar kept rising and inflation was eating away at everything, but now the dollar has come down sharply; there are at least some early hints that things could improve.
Adriana Buelvas, logistics worker
Others say the short-term reality feels harsher. Cross-border shoppers and vendors reported spikes in local prices immediately after political change, as buying surged and supply chains adjusted. For many households, an eventual recovery in oil revenues will feel like a lifeline, only if investment reaches beyond oil into jobs and services.
It is expected that the economy will improve with the reopening of the oil industry, but it will only work if there is real investment and if growth goes beyond oil.
José Arias, construction worker
Structural hurdles that could stall any rebound
Even with access to markets, Venezuela faces deep structural problems. The oil industry suffers from decaying infrastructure, shortages of diluents, shipping bottlenecks and years of underinvestment. The currency, the bolívar, has been rapidly depreciating, widening the gap between official and market exchange rates. Inflation remains a major constraint, with unofficial estimates near 480 per cent at the end of 2025.
The economy is on a knife's edge. The wealth of the country depends on oil flows. Take that away, and you are basically going to have close to zero income.
Juan Nagel, University of the Andes business school
Disinflation would require a credible monetary programme, tighter fiscal discipline and a steady return of foreign exchange. Oliveros projects that, under normalisation, inflation could fall toward 120 per cent, a large improvement that would nonetheless leave Venezuela with one of the highest inflation rates in the world.
External debt presents another obstacle. Total liabilities could be around US$168 billion once foreign settlements and loans are included. Restructuring depends on scaled-up oil production, access to international financial channels and a clear legal framework for negotiating haircuts and repayment schedules.
What investors are watching
Market indicators show improving sentiment, but for now that optimism rests on expectations rather than completed reforms. Venezuela was reintroduced to JPMorgan’s Emerging Market Bond Index in 2023, and its country risk premium has fallen since early January. Wall Street teams and investment funds are in Caracas to assess opportunities in agriculture, infrastructure and human capital, sectors that need financing but require lower capital outlays than energy.
The market is reacting to expectations, not to reforms that have already happened.
María Cristina París, financial adviser
- Oil output and exports, including access to diluents and shipping capacity
- Exchange rate movements and availability of dollars for businesses
- Inflation trends and any announced monetary policy framework
- Progress on debt access, restructuring talks and legal clarity for creditors
- Investor visits and concrete commitments from foreign oil firms
What this means for Venezuelans now
A reopening of oil markets could restore fiscal breathing room and reduce the worst daily pressures, but it will not deliver instant relief. Restoring production, rebuilding infrastructure and re-establishing credible fiscal and monetary policy will take months, likely years. The political choices now will shape whether cash flows translate into broad-based economic recovery or a temporary easing that leaves long-term vulnerabilities intact.
For many Venezuelans, cautious optimism has returned, alongside continued anxiety. The path forward depends on sustained policy credibility, investment beyond oil and the capacity to manage inflation and debt. Until those pieces are in place, the economic shift remains promising but precarious.
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