Venezuela debt crisis thrust into limelight after Maduro ouster

The overthrow of Nicolás Maduro’s regime brought Venezuela’s debt crisis – one of the world’s largest unresolved sovereign defaults – into the spotlight.

After years of economic crisis and US sanctions that cut off the country from international capital markets, Venezuela defaulted in late 2017 after failing to make payments on Eurobonds issued by the government and the state oil company, Petroleos de Venezuela, known as PDVSA.

Since then, accrued interest and legal claims associated with previous forfeitures have added to the unpaid principal, swelling the total external liabilities beyond the face value of the original bonds.

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Venezuela’s distressed debts have risen since US President Donald Trump came to power in January 2025, as speculators bet on the possibility of political change.

Here’s a look at which entities owe money, what might be included in a restructuring, and who might be knocking on Caracas’ door to collect the money.

How much does Venezuela owe?

Analysts estimate that Venezuela has about $60 billion in distressed bonds outstanding. However, the total external debt, including PDVSA liabilities, bilateral loans and arbitration awards, is approximately $150 billion to $170 billion, depending on how accrued interest and court rulings are calculated, according to analysts.

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The International Monetary Fund estimates Venezuela’s nominal GDP at $82.8 billion for 2025, implying a debt-to-GDP ratio of 180% to 200%.

People walk in a market in the low-income neighborhood of Petare in Caracas, Venezuela, November 16, 2024. (Reuters/archive photo)

PDVSA’s bonds due in 2020 were originally secured by a majority stake in US-based Citgo refinery, which is ultimately owned by Caracas-headquartered PDVSA. Citgo is an asset now at the center of creditors’ court-supervised efforts to recover value.

Who carries what?

Years of sanctions, including a trading ban on Venezuela’s debt, have made it difficult to monitor ownership.

The largest share of trade creditors is likely to consist of international bondholders, including investors specializing in distressed debt, sometimes called vulture funds.

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Among the creditors is a group of companies that obtained compensation through international arbitration after assets were confiscated by Caracas. US courts have upheld billions of dollars in damages to ConocoPhillips and Crystallex, among other companies, converting those claims into debt obligations and allowing creditors to pursue Venezuelan assets to secure themselves.

A growing group of court-recognized claimants are vying to recover their money from Citgo’s parent company through US legal proceedings. A Delaware court recorded nearly $19 billion in claims at the auction for PDV Holding, Citgo’s parent company, far exceeding the estimated value of Citgo’s total assets. PDV Holding is a wholly owned subsidiary of PDVSA.

Caracas also has bilateral creditors, primarily China and Russia, which have provided loans to both Maduro and his mentor, former President Hugo Chavez.

Hugo Chavez, then President of Venezuela, gestures during his “Alo President” program in front of a photo of Che Guevara on October 14, 2007, in Santa Clara, Cuba. (Photo by Sven Kreutzmann/Mambo/Getty Images)

Exact numbers are difficult to verify because Venezuela has not published comprehensive debt statistics for years.

Far restructuring?

Given the large number of claims, legal proceedings and political uncertainty, the formal restructuring process is expected to be complex and lengthy.

It is possible that sovereign debt settlement will be based on an International Monetary Fund program that sets financial targets and debt sustainability assumptions. However, Venezuela has not held annual consultations with the IMF in nearly two decades, and remains starved of the lender’s financing.

US sanctions represent another obstacle. Since 2017, restrictions imposed under Republican and Democratic administrations have sharply limited Venezuela’s ability to issue or restructure debt without explicit licenses from the U.S. Treasury.

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It is unclear what will happen with US sanctions. For now, President Donald Trump has said the United States will “run” the oil-producing country.

What are redemption values?

Bonds returned about 95% at the index level in 2025.

Many of them are currently trading between 27-32 cents on the dollar, MarketAxess data shows.

Citigroup analysts estimated in November that at least a 50% principal reduction would be needed to restore debt sustainability and meet potential conditions from the International Monetary Fund.

Under Citi’s base case, Venezuela could offer creditors 20-year bonds with a coupon of about 4.4%, along with 10-year zero-coupon bonds to make up for delayed interest. Using an exit yield of 11%, Citi estimates the net present value of the package in the mid-40s of cents on the dollar, with redemptions potentially rising to the high 40s if Venezuela hands over additional contingent instruments such as oil-linked guarantees.

A motorcyclist passes in front of an oil mural in Caracas, Venezuela. (Javier Campos/NoorPhoto/Getty Images)

Other investors draw a broader scope. Aberdeen Investments said in September that it had initially assumed a recovery of about 25 cents on the dollar for Venezuelan bonds, but improving political and sanctions scenarios could push the recovery to the low to mid-30s, depending on the structure of any deal and the use of oil-related or GDP-style instruments.

What is the economic situation in Venezuela?

Recovery assumptions stand against a bleak backdrop.

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Venezuela’s economy contracted dramatically after 2013 when oil production plummeted, inflation soared and poverty increased. Although production has stabilized somewhat, lower global oil prices and discounts on Venezuelan crude prices are limiting revenue gains, leaving little room for debt servicing without deep restructuring. The recent US blockade of sanctioned oil tankers has exacerbated the situation.

Trump said US oil companies are ready to handle the difficult task of entering Venezuela and investing to restore production, but details and timelines remain unclear. Chevron is the only major American company currently operating in Venezuelan oil fields.