US military action in Venezuela and its implications – by C.M.A.Nayar

Synopsis : While most of the nations consider US action in Venezuela as violation of international law, US considers it as an action for protecting US national interests . According to USA , the risk to US national security comes from the influence of extra-Western-hemisphere actors ( mainly China )  present in Venezuela as well as in most of the South American countries . US production of oil in 2024 was around 22 million barrels per day with consumption slightly below production and US does not really need oil from Venezuela  . While Venezuela is not a producer of cocaine , it is a transhipment point for transport to USA. Maduro is charged with narco-terrorism in US court . USA is very much concerned about the Chinese presence in South America through its BRI projects and increasing export of goods. This is perceived as a national threat for USA. US has been trying to promote its free market capitalism and neo-liberalism in South American countries without success. US is now trying to change its strategy towards South American countries with a new plan with the basic intension of reducing Chinese influence in these countries in a manner adapted to each country . The ultimate US objective  is to protect its national interests from probable threats from China . This is important because USA could be an indirect ( or perhaps even direct ) participant in the probable flare up between China and US allies/partners in South China sea and East China sea in the foreseeable  future. Venezuela’s interest in the post Maduro period will be to rebuild the nation and spring back to prosperity with international assistance or with US assistance . US will do everything possible to reinforce its role in Venezuela with the help of Venezuelan Govt.  US may also try to apply similar model in other South American countries depending on the success in Venezuela.  

1.Introduction

While oil-interest and control of drug-trafficking are presented as the main reasons for the US attack on Venezuela , the real reasons could be strategic for the implementation of the National Security Strategy  signed by President Trump in November 2025. Admiral Holsey , former Commander of Southern Command of USA had given a presentation to the  US Congress on the need to have a new policy towards South American Countries for persuading them to come out of the  influence of extra-Hemisphere countries like China, Russia and Iran . He had made particular reference to Venezuela , Nicaragua and Bolivia . We have to analyse the logic of the recent US military action in  Venezuela taking into account all these aspects .

2.Oil-interest

Data released by US Energy Dept shows that

• US consumption of oil is slightly less than its production in 2024 . US production is around 22 million barrels per day (around  22 % of the global production )
• Venezuela’s total production  of oil is around 950000 barrels per day (  less than 1 percent of the total global production of oil )
• Venezuela’s major export destination of oil in 2025 is  China . ( US used to be a major client till sanctions were imposed )

Note : Oil-production in barrels include liquified natural gas but does not include gas transported through pipelines

It is true that Venezuela has huge deposits of oil ( around 330 billion barrels )  and US oil companies could have interest in exploiting these reserves on a medium-term and long-term basis . In fact , their own installations lying idle without proper maintenance could be revived partly if the ownership issues could be sorted out with the Venezuelan Govt. When US oil companies were operating in Venezuela , the oil-production was around 3.5 million barrels per day. Contrary to the UNFCCC  position , USA bets high on oil and gas ( I think US may be pragmatic ) and hence US interest in  oil could be strategic . In spite of all the discussions in UNFCCC for bringing down the consumption of fossil fuel , the oil production has gone up from 94.4 million barrels per day in 2015 ( year of Paris agreement ) to 102 million barrels per day in 2025 .

2.Drug-trafficking 

While Venezuela is a transit-point for cocaine , it is not a producer of cocaine . Colombia , Peru and Bolivia are the biggest producers of cocaine in the region . In the normal course , USA could have targeted these countries for massive destruction of coca cultivation . Instead USA presumably chose Venezuela for  punitive actions. While UN and several countries have raised their concern over US attack on Venezuela , USA will pay no heed claiming that such action is in conformity with  its sacrosanct definition of national security .

3. US National Security Strategy

This analysis leads me to the conclusion that the real reasons of US attack could be           different . In my view , it is the first  step for implementation of the US  National Security Strategy in Western Hemisphere.  According to US definition , Western Hemisphere includes  Canada, the United States, Mexico, all the countries located in South America, beneficiary countries (as defined by section 2702  ) , the Commonwealth of Puerto Rico, and the United States Virgin Islands. USA wants to have control over these countries for promoting US strategic interests . US considers the situation in many of these counties  as alarming with the increased influence of China in trade and in BRI projects and the first step will be  to decouple Venezuelan economy from Chinese influence. It is estimated that around 400000 Chinese live in Venezuela in 2025 . There are also around 600 Russians and 100 Iranians living in Venezuela for rendering help to run the oil installations . According  to unconfirmed sources   even Hamas and Hezbollah have  camps in Venezuela .

US feels that this action will  give a warning signal to other countries in South America. Simultaneously, the US State dept is engaged in a dialogue ( overt and covert ) with these countries for making them toe the US line.

4. China’s influence in South America

China has been building its influence in South America through trade and investment   during the last 10 years . China has made massive investments in the region  through its BRI projects, infrastructure lending and Foreign Direct investments in energy and communication . China is also cooperating with these countries in space sector as well as in the manufacture of military equipment .  China has  expanded its cultural, diplomatic, and military presence throughout the region. China’s bilateral trade with countries like Brazil, Peru, Chile , Bolivia and Venezuela has been increasing substantially with positive trade balance for the South American countries ( Venezuela had a small deficit  in 2024 ) . The Chancay port commissioned in Peru in 2024  with Chinese assistance will be a pivot for increasing Chinese exports to South American Countries . China is planning to stock manufactured goods in the godowns in Chancay port for supplying to all other countries with short delivery period .  In May 2025, President Xi Jinping announced a $9.2 billion credit line to Latin American and Caribbean nations for development projects . China’s strategy is to increase import of agricultural products ( soyabean , corn , meat etc ) and metals and minerals  from South America and export manufactured products to South America for creating a win-win situation . According to data released by China,  the trade between China and the Latin America and Caribbean region ( LAC ) was 485 billion $ in 2022 ( China’s exports – 251 billion $, China’s imports – 234 billion $ )  . China is leveraging the economic relations with South American countries for building strategic relations for becoming an influential player in the region . USA has not been building good relations with these countries for multiple reasons . In 2024, USA  had an export of 45.5 billion to  South American and Central American Countries and  an import of 159 billion $  .  In essence , USA is getting worried about the increased Chinese presence in its vicinity and would like to deal with South American nations  with a carrot and stick policy for making the situation favourable to it .

5. How will Venezuela spring back to prosperity ?

It is for the Venezuelan people to make the choice and initiate appropriate actions making huge sacrifices . The first step will be to stabilize the political situation by nominating Edmondo Gonzales who is said to have won the last election or  an interim president till a newly elected president takes charge. In any case , the new leader should be in a position to unite the Venezuelans in this hour of crisis without wasting time for witch-hunt .  Venezuela is suffering from hyper-inflation year after year and the loss of value of money  is affecting vast majority of the population . Retired people with pension have practically no income because of the loss of purchasing power . Ordinary citizens are not able to have essential commodities required for day to day life . Venezuela has a population of around 31 million  with a median age of around 30 years. People are looking for opportunities for  achieving prosperity through wealth-creation and its distribution . 8 million Venezuelans  have left the country temporarily and it will be necessary to create the conditions favourable for their return .

The overall objectives for Venezuela  could be to

• Revive the activities of the nationalized petroleum company PDVSA with fresh injection of funds along with freezing of past liabilities with a rescheduling of repayment through negotiations with creditors , debenture- holders and banks . I suppose that bonds issued by PDVSA are debentures without asset- backing . Still there could be litigations . Recapitalization of existing shares to represent its real value will be needed before injection of further equity . In this process , the existing shareholders will lose value considerably for the time being . It is also possible that state organizations with good cashflow may be asked to buy shares at the revalued price . If PDVSA performs well, these organizations will make good profit,
• Increase the oil-output to around 3.5 billion barrels per day which was achieved years ago targeting export of around 3 billion barrels per day leaving the rest for domestic consumption. This could add around 50 billion $  to the present  GDP which is around  83 billion $ in 2025 ( IMF estimate ) .
• Revive the oil economy by selling part of PDVSA assets in parcels without liabilities to private investors . Open new oil wells as quickly as possible in private sector .  .
• Since there has not been any major investment for infrastructure during the last two decades , it is necessary to mobilize resources from international organizations for building essential infrastructure .
• Bring down inflation drastically
• Reactivate the agricultural economy . Farm output has been falling year after year for multiple reasons resulting in import of some of the products . There is a need to correct the situation through policy directions .
• Reactivate the metals and minerals economy . This is under state sector . It will be good to explore the possibilities to promote private investment through joint ventures . In fact , it will be possible to give majority holdings to private sector with the state holding a certain percentage of shares with minority-blocking-rights .

In my view , Venezuela has two options

1. To establish an independent democratically elected govt with rule of law and institutional check and balance for bringing  Venezuela back to prosperity with international assistance
2. Bring back political stability and draw support from USA for bringing  Venezuela back to prosperity with the risk of being vassal state of USA

It is for the Venezuelan people to make the right choice at this crucial juncture with calculated risk without being overtaken by emotion .

5. Will USA be able to win over the South American Countries ?

US attempts to influence South American countries with free market capitalism and neo-liberalism in economic policies did not find much success so far and US will have to be more pragmatic in its approach with these countries which have embraced socialism . While a certain section of the middle-class in these countries do appreciate US capitalism , the vast majority of the population is for a socialistic pattern of society for countering neo-liberalism . Increasing influence of China in these countries  is a matter of concern for USA from a national security point of view . US Foreign Secretary Marco Rubio has initiated a new move to persuade these countries to go slow with  their strategic  relations with China by offering better conditions from USA or its allies. Will it work ? . There will be several hurdles. However , Venezuela could be a successful model if US could help a democratically elected Govt to achieve political stability with rule of law, economic revival with management of inflation, availability of essential commodities in the market  and adequate purchasing power for all. Simultaneously conditions should be created for reactivating  oil industry with the participation of US companies . Repeal of sanctions by US Govt and repeal of oil laws by Venezuelan Govt will be essential for the revival . A successful model in Venezuela will help USA to replicate such a model in some of the South American Countries .

6. Conclusion

6.1. The US action in Venezuela could be considered by many nations as violation of international laws. However , US will continue to insist that the action was undertaken to protect US national interest .

6.2. Venezuelan economy is in deep crisis and Venezuelans need a pragmatic solution to tide over the situation by reviving its oil industry and mining/metals industry . It could be through international assistance or through US assistance

6.3. US action in Venezuela appears to be for protecting US national interests from the influence of extra-Western- hemisphere actors.

6.4. USA is greatly concerned about the increasing influence of China  in South American countries through its BRI projects and export of cheap Chinese products . US considers it as a risk to its national security and is planning to initiate a new strategy for win over most of these South American nations  to its side . It will be a very difficult task.