What Happens If The Venezuelan State Collapses?

The immediate loss of 700k–900k bpd of heavy, sour crude, which cannot be swapped on a 1:1 basis, will cause a supply-side shock, forcing US Gulf Coast refiners to seek more expensive alternatives and spike the WCS-WTI differential.

Colombia and Brazil face the highest risk due to shared land borders, migration pressures, and fiscal strain, which threaten their sovereign ratings and local currency stability.

Absolutely not. The lack of a stable, internationally recognized government and the extreme complexity of current debt restructuring make any such holding a multi-decade 'value trap' with near-zero recovery potential.

Investors can hedge by going long on US-denominated safe-haven assets, shorting regional bank indices (e.g., in Colombia/Brazil), or increasing long exposure to stable economies like Mexico's industrial sector.

The primary threat is the uncontrolled deterioration of unmaintained offshore platforms and aging pipeline networks in Lake Maracaibo, which could cause massive, multi-national oil spills across the Caribbean basin.