Economic pundits state it would not immediately translate into economic or military implications. It is still slightly hazy, why the US has gone thus far to invade a frail country and capture a faded authoritarian. The US has no intention, if truly seen, just to revive a country, which has voted in an iron-fisted ruler for three consecutive terms, even embroiled in its own turmoil.
For China, Venuzuela has already become a docile carpet, where it can play its geopolitical games and slowly capture a continental control as most of the South American nations face volatile economic situation and massive inflation.
True Motive
The US also wants to reduce its dependance on the Canadian oil supply. Unashamedly and openly asking for access to the Venezuela’s oil reserves shows the desperate position to frack the US oil deposits because it is a costly exercise -at least USD 70 per barrel. This comes at a time Saudi has slashed oil prices to less than 58 USD at the time of US invasion (Now, it rides at 59.30 USD a barrel. The world’s largest reserves hold about 303 billion barrels or 17 per cent of the global reserves. Majority of these crude deposits are found in the Orinoco oil belt. Contrarily, the South American country’s oil infrastructure is severely degraded due to lack of investments over the decades and much of its oil is either heavy or extra heavy and to extract and process will be much more costly, which Washington would have given enough thoughts one presumes.
China’s Strategic Playground
Very strong reasons for this intervention could be because China is already there in Venezuela and had built a naval port near Caracas, lent around USD 60 billion line of credit and thereby, started controlling 60 per cent of its oil and majority of its ports. It has also been financing, constructing and buying up important commercial ports across Latin America and the Caribbean (LAC), deeply embedding its maritime influence in those waters. China’s idea is to strike in two ways: Its huge investments will give itself vast commercial opportunity and generate a strategic leverage close to the US shores by accumulating key and sensitive data and expand geopolitical influence in these parts of the world. It is also allegedly building a digital currency, by which the Latin American nations and some of the EU countries began to trade. The current stake supposedly is around USD 200 billion, which is part of the China’s mighty de-dollarisation drive.
If the Chinese continue to hold oil reserves in Venezuela, the US would be at a huge loss as someone from the eastern hemisphere would enjoy such a position than the US sitting very close and has no access to these deposits. But the American foresight is that the crude might drop to less than USD 50 by June 2026. Then, come June it may not hold its oil hegemony any longer.
Is it oil, drug trafficking or China’s presence in South America. The guess is still on?