Venezuela stands at a decisive juncture. Asset recovery and creditor restitution have moved from the margins to the centre of the country’s economic and political future. What were once regarded as technical legal matters now fundamentally shape prospects for stability and governance legitimacy. Following years of sovereign default, protracted litigation over strategic assets such as CITGO, and a complex web of bilateral and commercial claims, the coming weeks threaten to rewrite both creditor hierarchies and Venezuela’s economic trajectory. The question is no longer whether change will come, but what form it takes.

Here are the six key considerations that will help shape the future of Venezuela:

Sanctions and Licensing Signals

The evolution of US sanctions and licensing policy remains the single most consequential external variable in the near term. US Treasury and OFAC designations (and, critically, clarifications on what transactions are permissible) directly affect PDVSA’s ability to engage with creditors, settle claims, and restore oil-sector cashflows. Since 2017, sanctions have prohibited dealings in Venezuelan debt and severely constrained financing activity, freezing most restructuring pathways. Any shift by Washington, whether incremental relaxations tied to political targets or broader licensing for investment and trade, could rapidly alter the feasibility of debt talks and the pace at which operational revenues return to the system.

Oil export mechanics as a real-time barometer

The mechanics of Venezuela’s oil exports offer a practical, real-time indicator of fiscal viability. Storage capacity constraints, access to diluents required to process heavy crude, and tanker movements all provide immediate insight into whether PDVSA can sustain even limited hard-currency inflows. Exports to traditional Asian buyers have been stalled since November following the US blockade, which has increased stockpile pressure. The recent announcement of a US ‘indefinite’ control over Venezuela’s oil sales will alleviate some of this pressure, although it remains unclear what portion of revenues will be shared with PDVSA and Venezuela. The country’s reliance on imported diluents, including light crude from Iran, further exposes operations to disruption. Tracking these dynamics in the coming weeks will be essential to understanding how long PDVSA can maintain activity and determining what that means for Venezuela’s near-term liquidity.

CITGO process milestones

At the core of creditor leverage lies the unfolding process surrounding US-based CITGO, long regarded as Venezuela’s crown-jewel overseas asset. A lengthy court process to sell shares in PDV Holding, CITGO’s parent, saw a Delaware judge in November 2025 authorise a USD 5.9 billion bid from an affiliate of Elliott Investment Management, a result that largely favours PDVSA’s 2020 bondholders. Venezuela and rival bidders have challenged the order on appeal, leaving ultimate outcomes uncertain. Judicial decisions in the US (including appeals, licensing responses and any final auction approvals) will unfold over the coming months and could materially reshape recovery values and creditor hierarchies, given CITGO’s importance to long-term revenue generation.

Bilateral creditor behaviour

Beyond Western commercial creditors, Venezuela’s liability profile includes substantial bilateral exposures, particularly to China and Russia – both of whom have engaged in quiet renegotiations, offsets and cargo-backed arrangements that bypassed conventional bondholder processes. These manoeuvres matter not only for recovery economics, but also for the formation of strategic creditor blocs. This will be especially relevant with a greater US involvement in PDVSA. The interaction between state-to-state interests and commercial creditor demands has the potential to reshape pari passu debates and any eventual negotiated framework.

Signals of a sequenced framework

While markets may react to the volatile political developments making front page news, lasting outcomes will depend on the creation of a coherent, sequenced repayment framework. A credible plan that integrates bonds, arbitration awards, bilateral facilities and ongoing enforcement actions into a transparent settlement architecture could unlock both creditor engagement and wider investment confidence. In the absence of clear sequencing and governance oversight, ad hoc deals risk deepening fragmentation and entrenching uncertainty.

Looted assets and restitution as a pillar of rebuilding

Beyond formal sovereign debt and corporate claims lie the misappropriated assets allegedly syphoned by Hugo Chavéz and, more recently, Nicolás Maduro and his inner circle, spanning cash reserves, foreign real estate and cryptocurrencies. Recent actions to preserve such assets, including freezes imposed by Switzerland following Maduro’s capture, explicitly acknowledge the possibility that these funds could be returned for the benefit of the Venezuelan population. Although legally complex, restitution arguments are gaining traction that these assets properly belong to the Venezuelan state and could be mobilised both to satisfy creditor claims and to fund social and reconstruction priorities. Integrating looted-asset recovery into a broader strategy of restitution and national rebuilding could mark a shift from crisis management toward sustainable recovery.

If you would like to discuss this topic further, please contact Joana and the team at enquiries@raedas.com.