Venezuela's Caracas bourse defies crisis; IBC Index up 84% since US move

Venezuelan's Caracas Stock Exchange’s main index (IBC) surged sharply on January 6, climbing nearly 50 per cent following a series of dramatic developments in Venezuela. The rally came just days after a covert US military operation resulted in the capture of South American country's President Nicolás Maduro.

US-Venezuela crisis at glance

On January 3, the US launched a major intervention in Venezuela, capturing President Maduro and his wife, Cilia Flores. The operation, dubbed “Operation Absolute Resolve,” saw the couple detained and transported to New York, where they face charges of narco-terrorism and drug trafficking. 

 

This military action follows months of escalating pressure from the US on Maduro’s government, which had already faced increasing restrictions on its oil exports due to a blockade imposed by the Trump administration in mid-December. The blockade severely curtailed Venezuela’s ability to ship its substantial oil reserves, stored in tanks and tankers, and is seen as part of broader efforts to weaken the Maduro regime.

 

IBC index soars amidst crisis

Despite the country’s political turmoil, the IBC index has skyrocketed by nearly 84 per cent since the capture of President Maduro. In the period from December 23, when US President Donald Trump intensified sanctions against the Venezuelan government, the index has surged by 148 per cent. This sharp rally reflects growing investor optimism regarding potential sanctions relief and the possibility of an economic rebound.

 

It’s worth noting that the Caracas Stock Exchange has low liquidity and a limited public float, meaning price movements are often more volatile than those seen in larger, more diversified markets.

 

Investor optimism following the US intervention is largely rooted in expectations of a major economic overhaul. The Trump administration has hinted at involving major US energy companies to help restore Venezuela’s crumbling oil infrastructure, which holds the world’s largest proven oil reserves. Many investors are betting that the fall of the Maduro government could pave the way for a relaxation of international sanctions and a revival of the country’s key oil sector. 

US-Venezuela crisis latest updates

In a further development, President Trump announced that Venezuela’s interim authorities would provide between 30 million and 50 million barrels of high-quality, sanctioned oil to the US at market prices. In a post on his social media platform, Truth Social, Trump explained that the proceeds from the oil sale would be under his control and would benefit both the Venezuelan and US populations.

 

“This oil will be sold at its market price, and that money will be controlled by me, as President of the United States of America,” Trump wrote, outlining plans for how the funds would be used to support both nations.