March 2022 – @MarianaVargas – After February 22, 2022 the world has not been the same. The Russian-Ukrainian war has opened the world’s eyes to where we stand and the importance of certain countries to the international economy and political order.
It is worth mentioning that lately we have seen a Saudi Arabia somewhat distanced from the United States. In late 2021, the U.S. toured the Middle East in an effort to ask OPEC countries to increase production. That entire effort was unsuccessful, as several countries did not comply with such a request. This policy shift is credited to the new Saudi prince, many analysts have commented that the United States has lost a strategic ally in the region.
We turn to Europe and we see Russia suffocating the United States and Europe energetically, China being the final destination of the entire world’s sanctioned crude oil and buying it at deep discounts, a Latin America suffering the consequences of what is happening extra-continentally, with more expensive energy sources and food rising in price.
We also see large international oil companies leaving Russia. Although there are others that have preferred to stay and deal with reputational issues of public opinion. It is worth noting that no oil service company has announced its withdrawal from Russia, but it has announced a decrease in production after mentioning the possibility of sanctioning those that remain.
Under this entire context, an unprecedented event takes place. The United States sends a delegation to Venezuela, a country that does not have a functioning American embassy or direct flights, a country where it is easier to reach Teheran or Moscow than Miami, from the release of Citgo prisoners to negotiating the easing of sanctions. In a more global analysis, it seems that the United States is taking advantage of the above mentioned global context to get closer to Venezuela, a mission that goes beyond prisoners and oil. The United States wants to bring Venezuela back to the Western Hemisphere.
We do not believe that this relationship will be relaunched immediately, nor that Russia will disengage from Venezuela, in view of the fact that its interests are not purely strategic allies or for the sake of convenience, no. The relations with Russia in Venezuela go further than that. Relations with Russia in Venezuela go beyond that; they are geo-strategic, since Russia has a strategic pivot in Latin America, willing to support it, with a short distance to the United States and practically owner of the Caribbean Sea, in addition to the equidistance that Venezuela has in the American continent. Another great reason would be the political agreement that both countries have; an anti-US stance. To leave Venezuela would be to leave a possible pioneer of Latin American interests before the United States.
What will happen to the countries of the world, the countries of the region, when they see a Venezuela doing business with the United States? You cannot imagine the number of calls from clients we have had after that visit. It was not just any visit. Perhaps the last visit of someone of that rank was President Clinton to Caracas in Caldera’s time in the late 1990s.
Will Venezuela go back to a time when Venezuelan foreign policy was based on representing the interests of the region to a United States willing to continue imposing a Monroe Doctrine?
According to our calculations at GELA, PDVSA may be receiving some US$ 2 billion per month from the sale of crude oil and gasoline to the domestic market. To understand this number, during 2020 PDVSA only received 4 billion dollars in 12 months, still far away from the 50 billion dollars a year in the 2007 boom. According to our forecast, all of 2022 we will have high crude oil and natural gas prices.
This story is just beginning and if the United States continues with this approach, Venezuela could be opening its full potential to the West. The United States, true to its democratic tradition, will ask the Venezuelan government for more democratic conditions, fairly and more transparent elections for 2024. In these two years many things could happen and we will be watching closely.