By: Vivek Mishra
This article originally appeared in ORF on October 18, 2024.
Political instability has been a long-defining characteristic of the Bolivarian Republic of Venezuela’s governance throughout its contemporary history. Officially a federal presidential republic, the country has been under the incumbent President, Nicolás Maduro’s authoritarian grip since he succeeded his mentor, Hugo Chávez, in 2013. Maduro’s disputed tenure has been marked by economic collapse, widespread human rights abuses, mass emigration, food and medicine shortages, and suppression of civil liberties and political dissent. Following the controversial 28 July elections this year, Maduro’s imposed victory seems to have drawn both domestic and international backlash, most palpably from the US.
Riding on the cheers of his dwindling Chavista fanbase, Maduro has continued Chavez’s legacy in more ways than one, particularly in maintaining an adversarial stance towards the United States (US). Over the last three American presidencies, the relationship between Washington and Caracas has deteriorated, tainted by distrust and heavy sanctions. In 2015, President Barack Obama sanctioned key members of the Maduro administration and military officials citing high-level corruption, arbitrary arrests, and human rights violations. While Obama played on the defensive with Maduro, President Donald Trump’s administration went on the offensive in 2019; escalating sanctions beyond solely Maduro’s assets in the US but also extending to foreign entities in the oil business with his government, including those in Iran, China, and Russia. The US sanctioned the state-owned oil company, Petroleos de Venezuela, S.A. (PdVSA), cutting off Maduro’s main revenue source while vowing to protect state assets “for the people of Venezuela.”
The US offered sanctions relief contingent on Venezuela’s return to democracy. Following the 2018 presidential elections, opposition leader Juan Guaidó claimed victory in 2019. He was recognised as the interim president by the US and other countries, alleging Maduro’s re-election was fraudulent. However, Maduro retained control over state institutions and the military, leading many to criticise Guaidó for being unable to initiate a democratic transition into power till the dissolution of the interim government in 2022.
Finally, under President Joe Biden, the US maintained the sanctions. Yet, this year’s elections saw Maduro once again retain power, much to the chagrin of the US which has alleged manipulation of the system to favour him for a third term as President of Venezuela. With Opposition leaders banned and banished, there are significant human rights violations against Maduro. Once again Maduro finds himself amidst domestic political unrest and growing external sanctions.
Sanctioned elections: Deal or no deal?
The Barbados Agreement was intended as a beacon of hope for Venezuela, which promised sanctions relief and a general license for oil trade and export with the US from the Biden administration, in exchange for free and fair elections. However, Maduro’s return to power ended that agreement. Popular opposition leader, María Corina Machado, who won the election primaries in 2023 with over 90 percent of the votes, was disqualified from presidential candidature on allegations of conspiracy against the ruling regime. While the Washington-based Organization of American States (OAS) “rejected” the decision and even Machado herself had taken the court ruling in stride, this was seen by the US as an attempt to eliminate competition by the Maduro regime, thus causing the US to reimpose sanctions and revoke the general license, citing Venezuela’s failure to adhere to the Barbados terms.
The National Electoral Council (CNE) declared Maduro to have won the 28 July elections with 51.2 percent of the votes, and Edmundo González Urrutia, Machado’s step-in candidate, with 44.2 percent. However, opposition tally sheets revealed that González, Machado’s step-in candidate, won 67 percent of the votes, compared to Maduro’s 30 percent. González fled to Spain following an arrest warrant. The US and other countries including Uruguay, Argentina, and Peru, denounced the election results and recognised González as the true winner of the elections.
A downward spiral
The sanctions imposed over the years and reimpositions have created a cyclical strain on the relationship between Caracas and Washington.
Venezuela, home to the world’s largest oil reserves has over 90 percent of its economy shaped by oil exports, making it a Petrostate reliant on foreign capital inflows. As US sanctions increased in scope and severity, the Venezuelan state-owned oil company, PdVSA, the primary source of Venezuela’s revenue, was sanctioned and barred from doing business in much of the international dollar ecosystem. The ripple effect extended to non-US entities, forcing the Maduro regime to pivot towards adversarial nations like Iran, Russia, and China to keep its economy afloat. Before the sanctions, the US was the largest buyer of Venezuelan crude oil, importing over 500,000 barrels per day (bpd), however, the sanctions are considered to have crippled PdVSA’s production and export capabilities. From producing 3 million bpd in 2001 to an estimated 900,000 bpd by the end of 2024, the Maduro government blames the US for the economic crisis, likening the sanctions to “missile strikes” that destroy the nation’s economy and livelihoods.
Upon the reimposition of sanctions after barring Machado from running for office, Venezuela accused the US of blackmailing the regime into lifting the ban. Maduro further blamed the US for disrupting the economy and interfering in internal matters, bluntly stating that Washington should “keep its nose out of Venezuela!”
These sanctions have consequences beyond Venezuela’s relationship with the US. While US oil supplies might remain relatively stable, given that the volume of Venezuelan oil imports has not significantly changed from before and after the sanctions; the larger issue lies in the diminished ability to maximise revenues in Caracas. Despite the sanctions, China continues to buy Venezuelan oil, inadvertently leading to the status of primary buyer. However, Beijing will likely leverage this position by negotiating lower prices, considering the less competitive market, which will impact Venezuela’s cash inflow. The sanctions affect Caracas’s business with Washington making other nations and global companies choose between accessing Venezuelan crude or staying out of US sanctions.
Venezuelans have taken to the streets in protest following the disputed election results, thus intensifying the country’s crisis. Since Maduro’s barely-there victory in 2013, over 7.7 million citizens have fled Venezuela, with over 6.5 million finding refuge in neighbouring Latin American and Caribbean countries, and around 600,000 fleeing to the US. Considering the worsening migration crisis in the Americas, the Biden administration decided to remove Venezuelans without a legal basis to remain in the US back to Venezuela. However, following the reimposition of the oil sanctions, Venezuela retaliated by halting the acceptance of repatriation flights from the US, further complicating the migration issue for Washington.
What’s next?
By now, it seems to be clear that sanctions are more than just economic or legal manoeuvres—they represent political leverage in the battle between Washington and Caracas. This relationship has framed itself around a quid pro quo dynamic, where both countries continue to use their resources as bargaining chips; The US wants democratic reform, while Maduro seeks an end to economic penalties while remaining in power. However, this has turned into a counterintuitive game where each player strips something away from the other: oil trade, sanctioning political leaders, or even blocking the repatriation of migrants.
The US and Latin America share a complex history, caught between interventionist and isolationist policies that have left lasting scars across the region. This push-and-pull dynamic has often left Latin America caught in the crossfire of US foreign policy decisions. While Argentina, Chile, Costa Rica, and many more Latin American countries refused to recognise Maduro’s claim to victory, Cuba congratulated Maduro on the win, reflective of the wider regional divide which could usher larger roles for Russia and China in the region—an already growing trend. As Washington navigates these pressures, it remains to be seen how the next administration in the US will deal with this bilateral in America’s backyard.
Vivek Mishra is a Visiting Fellow at ORF America.