Once a pariah, Venezuela leader is now a life-saver for the West

On November 7, cameras caught Venezuelan President Nicolas Maduro shaking hands with his French counterpart Emmanuel Macron as they met for a brief but candid chat on the sidelines of the COP27 climate summit in Egypt. 

The encounter was widely shared and commented upon on social media as people wondered if it was a sign that European leaders, troubled by a growing energy crisis, have finally come to terms with accepting Maduro’s government. 

Macron was among the world leaders that have for years refused to acknowledge the left-leaning Maduro as the rightful leader of Venezuela, which has the world’s largest proven oil reserves with more than 300 billion barrels. 

“Europe, particularly France, needs oil and Maduro needs money,” says Ronald Mayora Synnes, an associate professor of sociology at Norway’s University of Agder. 

“The war in Ukraine has had unexpected and indirect positive consequences for Venezuela where the economy has been struggling,” he tells TRT World. 

Energy bills for consumers around the world have risen steadily since Russian soldiers crossed into Ukraine in February. 

Europe, which before the war imported most of its natural gas from Russia, is facing a serious energy shortage after gas supply was switched off. There are concerns that the situation will get worse as weather gets colder in the coming weeks. 

Russia is the second largest crude oil exporter. The US has led allies, including the United Kingdom and European Union, to impose wide-ranging economic sanctions on Russia, including on energy exports. 

Synnes says only a week after Washington banned purchases of Russia oil, a delegation of American diplomats was in Venezuela to hold talks with Maduro’s government. 

Such a meeting was unimaginable till late last year as the two sides have had no diplomatic connection since 2018 when the US decided to recognise Venezuelan opposition candidate Juan Guaido as South American country’s President, says Synnes. 

This year Italy has already purchased more than 3 million barrels of oil from Venezuela under the US-authorised oil-for-debt deal. 

Venezuela’s oil production has dropped drastically from a peak of more than 3 million barrels per day (bpd) in the 1990s to half-a-million bpd currently as the country hasn’t been able to invest on its oil infrastructure. Venezuela currently exports 450,000 bpd, with a bulk of the crude going to China. 

A timely compromise

Both the Maduro government and the opposition are seeking to ease economic sanctions on Venezuela ahead of the presidential elections set for 2024. 

The opposition, in particular, has a lot of ground to cover if it wants to clear its track record since over the years it encouraged Washington to punish Maduro with foreign economic curbs. 

Many Venezuelans view the opposition as responsible for the economic pains they face, says Synnes, who has travelled to the South American country and interviewed locals extensively as part of his research. 

“The people want a solution for their economic problems. But they want a local solution. They don’t want foreign interference or some other country to take over their oil company.”

Thirty-seven-year old Guaido, who has been backed by western capitals since the 2018 presidential elections, was appointed by the US to head Citgo, a valuable Venezuelan company. 

Citgo, a subsidiary of Venezuela’s state-run oil giant PDVSA, owns a network of oil pipelines, fuel stations and refineries in the US. 

It was a major source of revenue for Caracas before Washington ordered its operations seized, and handed it over to an oversight board made up of the Venezuelan opposition. 

Sanctions relief is also on top of the agenda of a Norway-sponsored negotiating process between Maduro’s government and the opposition, says Synnes. 

A hidden hand

Venezuela’s oil-dependent economy went into a freefall after energy prices crashed in mid-2014, dropping 70 percent over the next 48 months. 

As the government was forced to roll back welfare projects, public anger grew and protests erupted in various cities. 

The financial sanctions imposed by Washington after Maduro won the 2018 presidential election added to Venezuela’s economic woes. 

Not a day went by without stories appearing in the western press about how Venezuelans had run out of toilet paper and people were scrambling to find medicines for their children. 

Confident of the media coverage he was getting, opposition leader Guaido even showed up at a military base in Caracas, claiming to head a military coup against Maduro. The coup attempt failed miserably. 

Venezuelan military plays an important part in the country's affairs, including PDVSA, the oil company. 

Maduro has succeeded in keeping the military on his side partly because of his longest-serving cabinet member, Defence Minister Vladimir Padrino Lopez. 

“Padrino is a very important person and he has support of many groups in the military. Even Guaido attempted the coup thinking Padrino would back him. That didn’t happen,” says Synnes.