President Donald Trump’s administration, which supports opposition leader and self-proclaimed President Juan Guaidó, has increased pressure on Venezuela’s embattled President Nicolás Maduro by adding sanctions and the possibility of a troop deployment to neighboring Colombia to the mix.
Mondays’ announcement of new sanctions on Venezuelan oil came with a photo of National Security Adviser John Bolton’s notepad, which had “5,000 troops to Colombia” scrawled on it. The announcement came shortly before Secretary of State Mike Pompeo issued a statement saying the sanctions “do not target the innocent people of Venezuela and will not prohibit humanitarian assistance including the provision of medicine and medical devices.”
But that, said Mark Weisbrot, co-director of the Center for Economic and Policy Research, “is just a lie.”
Over the next year, the sanctions will result in $11 billion in revenue loss and $7 billion in assets.
“Those are huge, relative to what’s left of the Venezuelan economy,” he said, pointing out that the country has already lost half of its economy in the last five years.
“And, of course, a lot of people will die. Because that’s what happens when you destroy an economy — because people can’t get access to essential medicines, for example,” he said.
If the sanctions continue, millions more will leave Venezuela. This will be on top of the over 3 million who have already fled. And a significant exodus, said Weisbrot, would “create pressure for some kind of intervention.”
“Bolton, clearly, he wants to do it. He doesn’t care. He might get some push back from the Pentagon or the State Department, because they tend to not like to get involved in wars that aren’t necessary and have no clear objective,” he said.
A catastrophic drop in Venezuela’s oil production happened just as the Trump administration’s earlier sanctions went into effect in August 2017. That round of sanctions, wrote Torino Capital’s Chief Economist Francisco Rodríguez, essentially resulted in the “toxification” of the Venezuelan economy.
Rodríguez (who has previously spoken to ThinkProgress about the potentially devastating effects of sanctions), pointed out that, “During 2017, it became increasingly clear that institutions who decided to enter into financial arrangements with Venezuela would have to be willing to pay high reputational and regulatory costs.”
And from here on out, things will only get worse.
The U.S. oil sanctions playbook
While the Trump administration uses different reasoning to apply oil sanctions to different countries, it’s easy to see the playbook that’s being followed, taking the example of, say, Iran.
President Trump and Secretary Pompeo have both claimed to be in support of the Iranian people, but not in favor of Iran’s government, which they call corrupt and dangerous.
Over issues ranging from Iran’s involvement in the Syrian conflict to its ballistic missile program, the Trump administration violated the 2015 nuclear deal and reimposed oil sanctions on Iran that were previously lifted under the agreement.
The Trump administration claims it doesn’t want regime change in Iran, a country of 80 million people whose economy was in tatters after decades of sanctions following the 1979 revolution. Rather, the administration says it wants the Iranian regime to change its behavior — that is, to essentially fall in line with U.S. policies in the region.
“They’re destroying the economy — that’s how people make a living. In Venezuela or in Iran, the oil revenue pays for most imports … and so imports that are essential are going to be greatly reduced,” Weisbrot said.
The Trump administration, though, insists that everything it’s doing is in support of the Venezuelan people and the course of democracy.
But this line of reasoning rings hollow to Weisbrot, who pointed out that the United States legitimized the 2009 military coup in Honduras, as well as the 2018 stolen election there. U.S. involvement in Venezuela is not about democracy, he added, “it’s about power.”
“The main reason we end up doing regime change in oil-exporting countries is because these countries generally have influence. They’re going to be regional players, like Saudi Arabia … they’re always going to want a government that is subservient to the United States,” said Weisbrot.
The effects of the sanctions on the U.S. oil market is unknown — exceptions could be carved out to help U.S. oil refiners, which have expressed concern about the new sanctions.