Venezuela looks to be a direct beneficiary of Joe Biden’s self-imposed energy crisis as its bond market was reported by Bloomberg to be surging last Friday.
The country’s bond prices surged on the public revelation of a meeting that took place on March 5 between Biden administration officials and the Maduro Venezuelan government. Venezuela bonds that mature in 2027 jumped to around 9.4 cents on the dollar, up from 6 cents. Notes maturing this year rose from 4 cents before the meeting to around 7 cents currently.
Bloomberg reported that investor interest in the Venezuelan bond market has picked up noticeably since the U.S. meeting. Activity in the market has shown a corresponding increase in trading volume.
American investors are still prohibited from buying Venezuelan bonds because of U.S. sanctions imposed on the Maduro government in 2019. However, many powerful European investors have started putting money on the likely result of a new oil agreement between Maduro and Washington.
Venezuelan activist and economics Ph.D. candidate Daniel DiMartino told National Review that the bump in his country’s bond market is a “clear signal” that Biden is preparing to lift sanctions against Maduro that would allow the U.S. to purchase and import oil from the resource-rich South American nation.
DiMartino added that even the possibility that Maduro’s hardline socialist regime is set to profit from America’s loss of energy supply because of new sanctions against Russia and its stifling of domestic production will enable Venezuela to expand its borrowing in international markets.
Biden’s national security advisor Jake Sullivan said that the U.S. will loosen sanctions on Venezuela if Maduro shows “concrete steps.” It appears that one of the steps would be the release of two American hostages. Maduro released them shortly after the March 5 meeting.
The administration has been criticized harshly for negotiation with the Maduro regime. The Biden White House has shown virtually no support for the previously recognized opposition to Maduro led by Juan Guaidó during the Trump administration. Washington has recently been overlooking oil trading between Venezuela and Iran, which is prohibited by longer-standing sanctions.
For now, Biden appears satisfied to pump cash into the corrupt and deadly Maduro regime rather than address the loss of American energy independence because of the aggressive restrictions imposed to cater to radical environmental activists.