The Venezuelan coup and its implications for global markets

Deutsche Bank believes that the international system established after 1945 is disintegrating, and international law and established norms have become irrelevant in the face of military and economic hard power. For investors, this means that geopolitical risk is no longer a tail risk, but a core pricing factor.

According to the Wind Trading Desk, U.S. foreign policy is showing new adjustments. Recent changes in Venezuela's political situation have drawn international attention, and this development may have far-reaching implications for U.S. influence in the Western Hemisphere.

The report points out that the global market may face many uncertainties by 2026. Whether it is the structural adjustment of the energy market or the evolution of international relations, both could have significant impacts on asset prices.

Power Vacuum and Extreme Uncertainty During Transition

According to Xinhua News and CCTV News, on January 3, 2026, actions initiated by the U.S. military led to the arrest of Venezuelan President Maduro and his wife, facing charges of drug terrorism. Deutsche Bank points out that despite the swift action, it was followed by an extreme political vacuum.

• Governance Model: The Trump administration has stated it will temporarily take over the governance of Venezuela until a "safe transition" is achieved. Maduro's Vice President Delcy Rodríguez has assumed the role of interim president and expressed a willingness to cooperate with the U.S. on January 4, indicating she is a key part of Trump's transition plan.
• Election Delay: Although opposition leader María Corina Machado and others are prepared to take over, Trump does not seem eager to push for elections.
• Risk Warning: Deutsche Bank warns that regime change has never gone as smoothly as expected. Who holds power in Caracas and how U.S. officials ensure continued governance will create significant uncertainty for both politics and the economy

Oil Opportunities: A $100 Billion Bet and a Double-Edged Sword of Prices

Venezuela has the largest proven oil reserves in the world, and controlling this resource would give Washington significant economic leverage. However, Deutsche Bank analysis suggests that this opportunity is not easily attainable and comes with complex market consequences:

Infrastructure Ruins: Venezuela's oil infrastructure, roads, and ports are in a state of disrepair. It is estimated that restoring its oil exports to historical peaks will require an investment of up to $100 billion over the next decade.

Price Shock: A substantial increase in Venezuela's exports could lower oil prices at a time when global supply is ample.

The Dilemma of U.S. Shale Oil: While low oil prices can hurt competitors like Russia, they also harm domestic producers in the U.S. Deutsche Bank data shows that many U.S. shale oil companies cannot turn a profit when oil prices are below $55-60. This could conflict with the broader goal of the Trump administration to promote U.S. energy production.

"Monroe Doctrine 2.0": Absolute Dominance in the Western Hemisphere

This action gives the U.S. "substantial teeth" in its focus on the Western Hemisphere. Deutsche Bank believes this is not just aimed at one country but reflects Trump's "Don-roe Doctrine" (Trump's version of the Monroe Doctrine).

Regional Deterrence: The success of this action may embolden Washington further. Trump has made it clear that the U.S. should dominate the Western Hemisphere. Deutsche Bank expects Cuba, Nicaragua, and Colombia may become the next targets for pressure (primarily economic, but military options are not ruled out).

Policy Evolution: The national security strategy set for December 2025 has already hinted at this shift. The U.S. military presence in the region and its "surgical" strike capabilities will become bargaining chips in negotiations on all issues from trade to immigration.

Global Expansion Risks and Domestic Political Calculations

Trump 2.0's foreign policy does not stop at Latin America. Deutsche Bank emphasizes that the U.S. military actions against Houthi forces in Yemen, direct strikes on Iran, and the recent actions in Venezuela demonstrate its military willingness.

• Allied Tensions: Trump's remarks about annexing Canada and purchasing Greenland are not mere jokes. Particularly, his reiteration on January 4th of the need for Danish territory (Greenland) for defense has heightened tensions in U.S.-Denmark relations, potentially affecting NATO cohesion.
• Midterm Election Maneuvering: While the quick success of these actions may boost Trump's approval ratings in the short term, the risks are equally significant. Deutsche Bank warns that if a "quagmire" effect occurs before the November midterm elections—such as a chaotic political transition or a surge in immigration—it could pose a threat to the Republican Party. Additionally, the economic benefits of upgrading oil infrastructure are unlikely to benefit the U.S. economy in the short term.

This report from Deutsche Bank presents investors with a world of "maximum uncertainty." The U.S. is rewriting the rules of geopolitics, and markets must be prepared for the ensuing volatility