Venezuela has been in a downward spiral for years, gripped by hyperinflation, severe food and medicine shortages, and a full-blown humanitarian crisis. Now Venezuela’s crisis has reached a new and critical stage, with impacts that could spill onto the world stage in a major way.

The worst-case scenario, which has a low likelihood but remains possible, is a U.S.-led military intervention that touches off a tense geopolitical confrontation, with the West on one side and Russia and China on the other.

The best-case scenario, which financial markets are now anticipating, is a regime change in which Nicolás Maduro, the current president seen by many as illegitimate, steps down from power.

If the Maduro government steps aside — handing the reins to a new government led by the leader of Venezuela’s National Assembly, a 35-year-old industrial engineer named Juan Guaidó — the hope is that Venezuela will then be able to rein in hyperinflation, rebuild its oil industry, and tackle the humanitarian issues that caused millions of citizens to flee.

If Maduro is ousted, this would be bullish news in particular for U.S. oil refiners, who process higher volumes of Venezuela’s heavy sour crude than anyone else.

Venezuelan oil production has fallen precipitously under Maduro. Under new leadership, the country’s battered oil industry could get back on its feet, and higher crude volumes would help boost U.S. refiners’ profit margins.

The National Assembly is Venezuela’s version of Congress. It was neutered by the Maduro government, but still exists. The head of that body, Juan Guaidó, created the current confrontation by declaring himself president on the reasoning that Maduro’s last election win was fraudulent (and the people need saving from the current regime). The United States and various Western allies have backed Guaidó; Russia, China, Turkey, and Iran stand with Maduro.

Getting Maduro to relinquish power will be tough. He has the backing of the Venezuelan military and supreme court at the highest levels, in part because high-ranking Venezuelan officials and leaders are deeply mired in corruption and bribes and likely human rights abuses.

With that said, the rank-and-file of Venezuela’s military are suffering along with the rest of the country. If the soldiers in the barracks side with Guaidó, and enough international pressure is then brought to bear, it is possible that Maduro could negotiate an exit — allowing for a peaceful regime change.

The frightening question is whether the U.S. will try a military intervention in Venezuela. John Bolton, the U.S. national security adviser, said in a press conference on Jan. 28 that “the president has made it very clear […] that all options are on the table.”

A military intervention is still a low probability, however, because the risks and dangers are so high. Russia, which has strategic interests in Venezuela and backs Maduro, has warned of potentially “catastrophic” consequences in the event of a clash.

Institutional investors see prospects for a peaceful regime change, to the benefit of Venezuela on the whole, as evidenced by their heavy buying of defaulted Venezuelan bonds.

Venezuela has been in default on nearly all of its debt for more than a year. In recent days, the value of defaulted Venezuelan debt has surged in hopes that a new Venezuelan government would renegotiate credit terms and start paying it back.

Price action in the global refinery industry has also been bullish. This hints at a forecast for regime change because refiners benefit from more crude oil on the market, not less. If Venezuela is able to restore the millions of barrels in crude oil output it lost under Maduro, then U.S. refiners will have lower costs on their primary input (raw crude), which they turn into finished product.

You can see the bullish refiner action via CRAK, the Van Eck Oil Refiners ETF, which is following through on a powerful V-bottom formation as of Thursday’s trading.

recent v-bottom formation in CRAK ETF

This is a vote in favor of a positive outcome for Venezuela (reinforcing the message of surging debt valuations), with knock-on benefits from higher volumes of Venezuelan heavy sour crude. And while most U.S. refiners are still in the red zone (as the SSI list shows below), a positive resolution to the Venezuela situation could shift them into new uptrends.

U.S. refiners in the SSI red zone

The CRAK refinery ETF — currently in the red — is a bellwether here, too. If CRAK pushes into the yellow zone as the Venezuelan government gets new management, it could be a strong indicator the whole refinery group is turning bullish.