China and US could be heading for another showdown in Venezuela

The New York Times reported earlier this month  that President Trump had met with Venezuelan military officers unhappy with the country’s government to discuss a coup against Nicolas Maduro. The implications of a U.S. military intervention in Venezuela might not only aggravate an already regionally spreading crisis, it might also put Washington at further odds with Beijing, analysts say.

If the Trump administration decides to go forward with military involvement, relations between the United States and China might be affected as well.

China is the most generous backer of Maduro’s government. Just this month, Beijing agreed to extend a US$5-billion lifeline to Caracas, with China’s Foreign Ministry spokesman saying in a statement, “The domestic situation is getting better and Venezuela’s government is actively promoting economic and financial reform.”

Beijing would not look kindly to a forced regime change in Venezuela, not while it gets Venezuelan crude at a hefty discount, especially with the Iran sanctions due in less than two months.

It is all about oil, as are many conflicts. Some observers have argued that Washington’s hostility towards Caracas is motivated by the desire to take control of the world’s largest oil reserves. Indeed, despite numerous reports that President Trump is mulling over the suspension of Venezuelan oil imports, he has not yet made good on his word, partly because of the humanitarian implications of such a move, and partly because Venezuelan crude is still needed.

Meanwhile, China is pursuing its own energy security by expanding its presence in oil fields around the world. Venezuela is a natural focal point for such an expansion. During his visit in Beijing this month, President Maduro said that Venezuela will increase its crude oil exports to China to a million barrels per day.

China has already spent US$65 billion on financial help for Caracas over the last ten years. Much of it has been repaid, but Caracas still owes some US$20 billion to its ally. Any attempt by Washington to force a regime change and cut China’s access to Venezuelan oil would provoke a quick reaction

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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