Venezuela, Guyana and Brazil get Prickly
Brazil has “intensified defensive actions” along its northern border with Venezuela to prevent an invasion of Guyana. US Army special forces also met with Guyanese leaders over the weekend.
The fracas is over a Venezuelan referendum, held yesterday by President Nicolás Maduro on whether two-thirds of Guyana known as the “Essequibo” is, in fact, part of Venezuela. Guyana wasn't asked what it thought about it. Caracas hasn’t released results yet, but the opposition is publishing photos of empty polling stations.
Historically, the squabble goes back to 1899, when the Essequibo was ceded the Great Britain, and the matter has been in limbo since Guyanese independence. Then the Stabroek Block was discovered offshore: Oil fields which ExxonMobile reckons hav the equivalent of some eight billion barrels of oil. At which that vague historical grievance became a real geopolitical hankering. While Venezuela is in no shape to actually fight a war, Guyana can hardly defend itself against the rain. So Brazilian forces are massing on the border and the US is lurking in the shadows.
Practically speaking, however, Venezuela can’t extract its own oil, much less anyone else’s. The US has lifted sanctions on its heavy, sour crude on the condition that Caracas allows free(ish) elections in 2024. It didn't. The reimposed sanctions, though, hardly matter, becasue under President Maduro Venezuala's state oil company was looted of most of its equipment and its infrastructure has crumbled. So Maduro is still president and is griping about a foreign invasion a la Argentina’s heave on the Falklands or Iraq’s on Kuwait.
With knock-on here is that this foolishness turns into a shooting war (unlikely) that it would put a halt Guyanese oil coming on line for the duration, as well as any ramp up of Venezuelan production. It wouldn’t do Brazil’s booming production too much harm, but you never know about these things. An open conflict would increase OPEC+ (currently slipping) ability of to control global oil prices, which won’t do the world any favors.
What a war would certainly do is create a displaced person crisis and the smart money is that they’d head north, creating a refugee crisis the US southern border. Combined with the escalation by Houthi's this weekend in the Red Sea, the two conflict zones would bring the global economy to a crushing halt over energy prices.
Still, a war in the Caribbean is unlikely, simply because Caracas can’t pull it off, But what the hell? Nonsensical invasions are fashionable this season. At least this one should be easy to roll back.
The article was updated 2 May 2024