On 5 March, senior US officials reportedly flew to Caracas for a meeting with the government of Venezuelan President Nicolás Maduro. The meeting has prompted many to question whether Biden is attempting to improve relations with Russia’s remaining international allies amid the war in Ukraine. What makes Venezuela a particularly interesting ingredient in this geopolitical soup is that just three years ago, the US and Venezuela broke off all diplomatic relations due to Maduro’s alleged electoral fraud and participation in various human rights abuses. Now that US sanctions against Russia ban all of its oil imports, some American leaders share a single thought: Venezuela has oil.

Democracy-gate

Before we move forward, let’s paint a picture. The year is 2019 and Venezuela is reeling from the aftermath of a particularly controversial election featuring all the usual highlights: the reelection of a long-time dictator, a potentially rigged election, outcries from a fresh-faced opposition leader, widespread protests and, of course, US participation. 

This Venezuelan presidential election took place on 20 May 2018 and has not gone down well in history. Various countries reject its result, including the US, European Union and most of South America. The Trump administration accused Maduro of election fraud and recognised the opposition leader, Juan Guaidó, as Venezuela’s lawful president. Trump also imposed sanctions on Venezuelan oil imports to weaken the Maduro government. In retaliation, Maduro broke all diplomatic ties with the US.

Before the US imposed sanctions, most of Venezuela’s oil was exported to US Gulf Coast refineries specifically built to handle Venezuela’s heavy grades of crude. At the time of the embargo, Maduro sought economic and diplomatic help from Venezuela’s allies (coincidentally all countries with volatile relations with the US). Russia, specifically, was monumental in ensuring that oil exports remained Venezuela’s largest source of foreign currency. Rosneft, Russia’s largest oil firm, allegedly became a middleman in selling Venezuelan oil worldwide. Much of this oil actually ended up in the US via intermediary oil-trading firms. 

Crude Catastrophe

This brings us to our story’s climax: Russia began an open military invasion of Ukraine on 24 February, calling it a “special military operation”. As the Russo-Ukrainian war continues to unveil further war atrocities – including civilian killings and mass graves, sanctions against Russia have hardened, and now include banning imports of Russian oil and coal – with the EU discussing it and the US implementing it. 

Now, Biden  appears to be attempting to boost domestic fossil fuel production while holding meetings with oil-rich countries such as Iran, Saudi Arabia and Venezuela. According to the White House Press Secretary, the purpose of the trip to Venezuela was to discuss a variety of issues – including energy security.

Interestingly, both Democrats and Republicans were quick to point to Venezuela as a substitute for Russian oil and gas exports. As per Scott Taylor, a former Republican congressman from Virginia, the United States should “take this opportunity to achieve a diplomatic win and a wedge between Russia and Venezuela.”

It is important to realise that maintaining the supply of oil in absolute quantity is not as crucial as alleviating the economic ramifications these sanctions will create. The US has a strategic oil reserve and continues to import most of its crude oil from Canada, Mexico and Saudi Arabia. The ban of Russian oil and gas, however, will nonetheless induce an inflationary panic across markets. Seeing the government actively seeking alternatives to Russian oil might assuage consumer and investor concerns.  

Maduro’s Choice

There is a question as to whether Maduro would betray Russia by exporting to the US. In March, Maduro criticised the intensity of sanctions slapped on Russia. “What they are doing with Russia is madness,” said Maduro, who, as per a Kremlin statement, went on to express strong support for the invasion. 

Still, Maduro seemed open to discussing oil deals with the US. As per a recent speech by Maduro, the oil of Venezuela is “available for whoever wants to produce and buy it, be it an investor from Asia, Europe or the United States”.

Finally, would Venezuela be able to fill the United States’ oil import gap? In 2021, the US imported 650,000 barrels of Russian oil every day, around the same amount previously imported from Venezuela in 2019. However, the blow from American sanctions caused Petróleos de Venezuela, S.A (PDVSA), Venezuela’s state-owned oil company, to cut productivity from over 1 million barrels per day (pre-US sanctions) to roughly 650,000 barrels per day in 2021. PDVSA is also closely linked to the Russian banks currently targeted by massive sanctions. 

Seeking American help could allow Venezuela to rebuild its infrastructure. This may be politically difficult, however, since there are many US politicians who are displeased that Biden would interact with Maduro. As per a tweet by Republican Senator Marco Rubio, “The White House offered to abandon those seeking freedom from Venezuela in exchange for an insignificant amount of oil.” 

Democratic Senator and Chairman of the Senate Foreign Relations Committee Robert Menendez called Maduro “a cancer to our hemisphere” and opposed a deal between the US and Venezuela. 

Still, Venezuela and the US seem to be going forward with these talks. “We agreed to work on an agenda for future talks,” Maduro said in a televised speech on 7 March calling for a “positive agenda for the government of the United States and the government of the Bolivarian Republic of Venezuela.”

The world has changed since the beginning of the controversy of Venezuela’s 2018 elections. War has ensued, massively increasing Venezuela’s bargaining power as a key oil producer. Moreover, support for opposition leader Guaidó has cooled in many countries, especially the EU, which no longer recognises him as Venezuela’s lawful president. Still, with the many human rights abuse accusations against him, Maduro will certainly remain wary of most of the Western world. Additionally, Russia’s support of Maduro’s presidency might carry a lot of weight in the present situation. 

Only time will tell whether Maduro will move away from Russia and towards the US. Washington, however, seems adamant to make friends out of old foes in its bid to stand up to the Kremlin while trying to keep its own economy secure.