Can Maduro Withstand Trump’s Pressuring Oil Campaign on His Regime?

Venezuelan President Nicolás Maduro’s regime faces increasing pressure from U.S. sanctions, particularly aimed at its oil trade. As the Trump administration escalates its enforcement actions, experts note that the impact on Maduro’s government could be significant.

U.S. Actions Target Venezuela’s Oil Dependency

The recent seizure of a Venezuelan oil tanker marks a critical step in the ongoing campaign against Maduro. This action aims to disrupt the primary source of revenue for a regime heavily reliant on oil. With oil accounting for over 90% of Venezuela’s government income, any blows to this sector are detrimental.

Consequences of the Oil Trade Blockade

• Approximately 11 million barrels of Venezuelan crude stranded aboard 39 tankers.
• PDVSA, the state-run oil company, faces increased financial strain with cargoes not generating cash flow.
• Recent U.S. actions are reshaping Venezuela’s oil export economy.

Melissa Ford Maldonado from the America First Policy Institute emphasized the regime’s dependency on oil money for maintaining loyalty among security forces and political allies. Without sufficient oil revenues, Maduro’s hold on power becomes increasingly tenuous.

Market Impact and Economic Strain

Experts indicate that U.S. enforcement of sanctions has fundamentally changed the dynamics of Venezuela’s oil exports. Jorge Jraissati, president of the Economic Inclusion Group, pointed out that the difficulties in selling oil have led to substantial discounts, pushing prices down. Venezuelan heavy crude now trades up to $21 per barrel below Brent prices.

The existing “dark fleet” of tankers, often used to evade sanctions, is also under strain. These vessels are becoming difficult to insure as ports and shipowners reconsider their involvement with Venezuelan crude.

The Humanitarian Crisis in Venezuela

• 80% of the Venezuelan population lives in poverty.
• 50% live in extreme poverty, earning less than $3 daily.
• More than 8 million people have fled the ongoing crisis.

Venezuela’s economic collapse, exacerbated by prolonged socialism, has rendered other sectors of the economy nearly nonviable. The dire situation doesn’t solely stem from sanctions but also from the regime’s internal policies.

Potential Outcomes and Future Considerations

Analysts warn that while oil sanctions pose a severe challenge to Maduro, they may not alone be sufficient to unseat him. Diplomatic isolation, sanctions, and seizure actions collectively enhance the chances of a regime shift.

Cale Brown from Polaris National Security noted that Maduro’s administration has historically sought alternative income sources when faced with external pressures, including illicit activities. Nevertheless, the recent strategy employed by the U.S. may underline broader geopolitical concerns in the region.

As Venezuela continues to grapple with these multifaceted crises, the focus remains on the role of oil. Cutting off Maduro’s revenue flow could weaken his regime, thereby supporting the Venezuelan populace in their pursuit of a sustainable change.