Venezuela Crisis – Causes & Consequences – Explained Pointwise

Following months of pressure on Venezuela & blaming the Venezuela government & military for being involved in drug trafficking that are harming the American people, the U.S. under Trump administration decided to attack the Venezuelan capital & forcibly apprehended the Venezuelan President Nicolas Maduro & flies him to the U.S. He will now face the charges of drug trafficking & narco-terrorism in New York court. The military operation, known as Operation Absolute Resolve, has triggered a wide-range of short-term & long-term consequences.

What are the reasons behind USA’s intervention in Venezuela?

1. Drug Trafficking: In 2020, the U.S. indicted Nicolás Maduro and other high-ranking officials for narco-terrorism, alleging they led the “Cartel de los Soles” to flood the U.S. with cocaine.
2. The “Backyard” Policy:
   • Intervention in Venezuela fits a long U.S. tradition of treating Latin America as a strategic sphere of influence under the Monroe Doctrine.
   • Under a revived Monroe Doctrine, the U.S. seeks to eliminate the influence of Russia, China, Iran, and Cuba, which have provided Maduro with financial, military, and intelligence support.
   • US leaders explicitly cast Venezuela, along with Cuba and Nicaragua, as part of an “axis of socialism” and a source of regional instability, suggesting regime change there is about reshaping the Western Hemisphere’s ideological map.
3. Strategic Energy Asset: U.S. refineries, particularly on the Gulf Coast, are specifically designed to process Venezuela’s heavy crude. Direct intervention is seen by the current administration as a way to secure a stable, non-Middle Eastern energy supply and lower domestic fuel prices.
4. Critical Minerals: Beyond oil, Venezuela possesses vast deposits of gold, bauxite, and rare earth elements. Access to these is increasingly viewed as a national security priority for the U.S. to compete with China’s dominance in high-tech manufacturing.
5. Regional Instability: The collapse of Venezuela’s economy led to one of the largest migration crises in history. U.S. officials argue that intervention is necessary to stabilize the region and facilitate the return of millions of displaced persons.
6. Human Rights: The U.S. State Department has frequently cited human rights abuses, the suppression of political opponents, and “fraudulent” elections (2013, 2018, 2024) as justifications for applying “maximum pressure” on the Maduro regime.
7. Economic Model: The nationalization of assets (including those of U.S. companies like ExxonMobil and General Motors) under Hugo Chávez and later Maduro created a deep-seated economic rift that the U.S. aims to “correct” by reopening markets.

What can be the consequences of such an intervention in Venezuela?

1. Political Instability:
   • Maduro’s capture and transfer to New York for trial on narcoterrorism charges leaves a fragmented leadership, with opposition figures and military remnants vying for control.
   • The U.S. administration has expressed intent to “run” Venezuela temporarily. However, analysts warn this could lead to internal power struggles among the remaining Maduro loyalists and the fragmented opposition.
2. Civil Unrest: Pro-government militias (known as colectivos) and military factions may launch an insurgency or guerrilla-style resistance, leading to prolonged civil conflict or even a civil war.
3. Geopolitical Polarization: Rivals such as China, Russia, and Iran have condemned the “blatant use of force,” viewing it as a return to “gunboat diplomacy.” Critics fear this may embolden other nations to launch similar unilateral strikes elsewhere (e.g., tensions regarding Taiwan or Iran).
4. Long-term Oil Outlook: If the U.S. successfully modernizes Venezuela’s decaying infrastructure, global oil supply could eventually increase by 2-3 million barrels per day, potentially lowering long-term energy prices. However, the short-term remains volatile due to the risk of sabotage on pipelines and refineries. 
5. Refugee Crisis: Intense fighting or a collapse of public order could trigger a fresh wave of migration into neighboring countries like Colombia and Brazil, further straining regional resources.

What can be the impact on India’s interests?

1. Energy Security: India is largely shielded from immediate supply shocks because its reliance on Venezuelan crude had already plummeted. In 2024-2025, Venezuela accounted for only 0.3% of India’s total oil imports due to ongoing U.S. sanctions.
2. Oil Imports: Indian private refiners, like Reliance Industries (RIL), possess some of the world’s most sophisticated “complex” refineries designed to process the heavy, sour crude that Venezuela produces. If the U.S. stabilizes the region and lifts sanctions, India could resume high-volume imports, helping to diversify away from Russian and Middle Eastern oil.
3. Recovery of “Stuck” Assets and Dividends: India has nearly $1 billion in dividends and payments stuck in Venezuela’s oil system. Projects like San Cristóbal and Carabobo-1 have been non-functional or underpaid for years.
4. Resumption of Production: A post-Maduro administration backed by the U.S. might allow OVL (ONGC Videsh Ltd) and Oil India to restart operations at these stranded oilfields, turning “dead” assets back into active energy sources for India.
5. The “Monroe Doctrine” Precedent: Analysts suggest the intervention signals a “harsher global order” where sovereignty is increasingly conditional. This puts pressure on India to secure its overseas assets in other volatile regions (like Africa or Central Asia) that may be subject to similar great-power maneuvers.

What can be the way forward?

1. U.S. Provisional Oversight: President Trump has stated the U.S. will “run the country” via a designated group until a “safe and judicious” transition is arranged. Secretary of State Marco Rubio clarified this as “leveraging control” over key assets rather than day-to-day administrative governance.
2. Debt Restructuring: A new government will need to negotiate the massive sovereign debt (over $150 billion) owed to Russia, China, and various private bondholders. The U.S. may use its “management” of oil revenues as a bargaining chip in these negotiations.
3. Counter-Insurgency: Neutralizing pro-Maduro colectivos (armed militias) and ensuring the military remains in barracks. A “peacekeeping” or “advisory” force may be needed to prevent Caracas from sliding into gang-led anarchy.
4. Engage multilaterally: Push through UN, BRICS, G20, and Global South forums for de-escalation, humanitarian aid, and respect for sovereignty, aligning with Brazil and others.
5. Humanitarian Surge: Activating the $606 million UN Humanitarian Response Plan for 2026 to address the immediate food and medicine shortages that the conflict might exacerbate.
6. Energy & Economic Safeguards:
   1. Diversify imports: Accelerate discounted Russian, US, and Middle Eastern crude deals to buffer price spikes; monitor heavy-sour premiums affecting refiners.
   2. Pursue opportunities: Negotiate favorable contracts in restructured Venezuelan oil sector, potentially unlocking $1B for Indian firms like ONGC.