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Yesterday, South American countries once again discarded the possibility of military intervention in Venezuela. Brazilian Vice President Hamilton Mourão argues that multilateral organizations, such as the UN, might put pressure on Venezuela’s anti-democratic leader Nicolás Maduro, to push him out of power. The VP wants Brazil to establish a dialogue with the Venezuelan Armed Forces—whose support is key to Mr. Maduro. Defections have started, with 170 military troops abandoning their positions so far.
But besides the diplomatic and humanitarian conundrum, the Venezuelan crisis is increasingly affecting Brazil’s market. The most obvious ramification is seen in oil prices, especially after U.S. President Donald Trump tweeting about “oil prices getting too high,” reinforcing the hypothesis of military action in Venezuela—home to the world’s largest oil reserves. Yesterday, oil prices sunk after Mr. Trump’s tweet, which was especially bad for Petrobras—the company lost 2.4% of market value.