Venezuelan Blow: moscow Is Losing Assets, Revenues, and Influence

The arrest of Nicolás Maduro and the potential establishment of the USA’s control over Venezuela’s oil assets are dealing russia a massive financial and geopolitical blow, undermining its position in Latin America and threatening its budgetary stability. russian experts acknowledge that moscow risks losing not only assets but also its ability to influence the global oil market.

With more than half of the world’s oil reserves under US control, Washington will be able to keep the price of russian oil at around $50 per barrel, which is critical for the rf’s budget.

Problems with Venezuelan debts create additional pressure. Between 2006 and 2017, the kremlin provided Venezuela’s government and the state oil company Petroleos de Venezuela S.A. (PDVSA) with $17 billion in loans. As of 2017, Caracas’ debt to moscow amounted to US$3.5 billion with payments deferred until 2027, making the return of those funds increasingly unlikely.

russia is also effectively losing control over Venezuelan oil assets. The shares acquired by “rosneft” in the late 2010s were transferred to “roszarubezhneft” after the US sanctions against PDVSA, but effective management of those shares under sanctions and political pressure seems unrealistic.

Overall, the likely reformatting of the Venezuelan oil sector under the USA’s control deprives moscow of one of its few energy footholds outside Eurasia. This points to the structural vulnerability of the rf’s economy and its critical dependence on external control over oil prices.