October 2022 – For Mariana Vrgas – When we speak of balance of power, we think of Europe, the region whose history witnessed the birth of so many states with similar strengths and aspirations. When we look at the United States, we can agree that its history does not resemble that of this powerful region. The US went from colonies to a federal country. However, ambition, power and the thirst to shape the international system to its liking, has allowed the United States to enter the international chessboard as a powerful and influential player.
It seems like yesterday, when we saw Cristina (Argentina), Lula (Brazil), Fidel (Cuba), Chavez (Venezuela) and Evo (Bolivia) united by sharing an international agenda with issues of common interest that fostered the Latin American regionalist sentiment, expressing that from Mexico on down we were united by the same history and apparently the same struggle.
Today we observe in Latin America how the populist leftist parties have said present, with strength and clamor, as is the case of Chile, Colombia and soon to be known; Brazil, however, we must remember that its existence does not prevent the populist right to finish developing properly and create a balance of power within each nation.
Venezuela has a large petrochemical industry, as well as natural gas and diesel production. Certainly its infrastructure is not at maximum capacity, although it should be noted that the possibility of Brazilian investment could turn this scenario around. How?
I recently read that Brazil had imported diesel from Russia, a player with a well-known international reputation today, however, economic alliances are by necessity and if we are talking about necessity, let’s touch on the issue of prices. Venezuela shares great proximity with Brazil, besides having an industry that can offer fertilizers (for its agricultural sector) and diesel. In previous articles I talked about the opportunities that this market was bringing, well here dear reader, I highlight one of them.
Another great opportunity is seen with Colombia. Its reserves are counting down and having a domestic market where natural gas is in such demand gives the executive a great task to act against the economic consequences that this market may bring. President Petro is looking for Colombia to reduce its CO2 emissions, for that he will seek to stop new oil and natural gas exploration contracts, implying that he prefers another country to be the one to deal with this issue. Colombia will promote renewables by increasing their use in the current Colombian energy matrix, but will it be so easy to replace gas and oil?
No, it is not simple at all, but Colombia is in the right place at the right time. Joining the Colombian market demands that prices be accessible and competitive with its current market, which brings us back to Venezuelan petrochemicals (fertilizers) and natural gas. Without a doubt, the coffee-growing country would enjoy fertilizers of nearby origin and competitive prices.
An alliance between Venezuela, Brazil and Colombia can be seen without blinking, the economic benefits that Venezuela provides are repaid in strength and regional political influence and the United States knows it. Biden and his entire bureau will be forced to rethink certain aspects of their policy in the region, from sanctions to considering what is in their best interest; the fact that Venezuela is the one exporting diesel to Brazil, takes Russia’s exports out of the map, but allows (with Lula) China-Brazil relations to improve and increase. Cost of opportunities for the United States are looming with only one election in the Latin American region, you can’t have it all.
After Biden’s speech at the UN in September we saw how the US agenda has several high demanding items; Russian-Ukrainian war, nuclear threats by Putin, European allies demanding more aid, gas and oil, action on climate change, monitoring and maintaining sanctions on numerous countries around the world and maintaining the reputation that the US desires.
The U.S. history with Colombia, Venezuela and Brazil allows us to analyze and project Biden’s possible position with this new axis that may soon be formed. Primarily the United States and Colombia had a relationship whose war on drugs united them, now with Petro in charge, this war ends and leaves the United States fighting alone.
The United States and Brazil were good allies, since Brazil pursues a permanent seat in the UN Security Council, besides being a BRICS country. Although everything seems to fit perfectly, Brazil keeps archived in its memory the case of U.S. spying on former president Dilma Roussef, a case that was later corroborated when Snowden published several national files and there, the messages of the president and part of her cabinet.
However, this did not stop Biden when he called Lula two days ago, making a friendly approach. It seems that the position of the United States – with Biden in power – is that once mentioned by President Truman “nations, like men, can point out their differences and still see eye to eye”.
There is no doubt America just got interesting again. Hydrocarbons not only function as a motor and industrial fuel, but also as a political fuel.
