Trump launches an order to China with the attack on Venezuela by putting Beijing’s interests in Latin America in check

The United States has struck a blow on the geopolitical table with its military operation in Venezuela and the capture of Nicolás Maduro and his wife, which will have a direct impact on its great economic and technological rival, China. This movement – political and oil interests aside – allows the world’s first economy counter Beijing’s growing influence in Latin America, where the Asian giant has a prominent presence in sectors such as mining (it obtains some of the key resources it needs in the technological race), investment in infrastructure or energy.

In a context of ironclad protectionism and tariff war promoted by the United States, China has strengthened ties with Latin American countries, which have allowed it to diversify its supply chains, so that the region has become the second destination of your investments abroad, according to Bloomberg. Currently, it is Brazil’s first trading partner and since last September it surpassed the United States to become the main source of Colombia’s imports, mainly of technology, machinery and textiles.

In the case of Venezuela, China was the destination of 85% of the country’s oil exports and, although the impact of US intervention on the costs of the raw materials it acquires will be limited, Xi Jinping’s government “has strong interests in energy, infrastructure and critical minerals in South America, which could now be threatened,” explain Christian Schulz, chief economist at Allianz Global Investors, and Alexander Robey, portfolio manager at the firm. Both emphasize that Washington has already issued warnings to other “non-aligned” Latin American governments, such as Cuba, Nicaragua and Colombia. “Brazil and even Mexico could also be at risk,” they add.

Experts maintain that in a positive scenario, a successful transition and economic recovery in Venezuela could stabilize the region in the medium termallow the return of many of the seven million Venezuelan refugees and sustainably strengthen pro-American political forces. However, they warn that past US interventions in the region have rarely brought lasting stability. On the other hand, the White House could have difficulty controlling Venezuela if the government resists pressure and receives support from allied countries. “Alternatively, civil unrest could generate new flows of refugees, destabilizing the region and beyond,” they add.

The oil tap and the connection with Cuba

80% of Venezuelan oil goes to China, because in a context you face sanctions, Venezuela has applied, like Russia, large discounts with respect to the barrel of Brent, the reference crude oil in Europe. “China has taken advantage of the market situation to acquire crude oil from both countries and direct it to its reserves, given that right now, it does not need it,” Antonio Aceituno, energy expert and CEO of the consulting firm Tempos, explains to this newspaper. The International Energy Agency recently confirmed that the market is in a situation of overabundance, so “the conflict in Venezuela does not affect it,” he adds.

“Venezuelan oil is irrelevant in global figures, in the global calculation of crude oil (…) The world consumes 100 million barrels a day, Venezuela is producing 0.9 because its industry is stagnant,” Aceituno adds. Of that amount, about 0.7 million would go to China, a figure that is not relevant enough to put the second largest economy on the planet to shame. From their point of view, the invasion of Venezuela would rather be aimed at cutting off the supply tap to Cuba, given that it is another of the great demanders of cheap crude oil from the South American country.

The lack of clarity about the possible economic and geopolitical impacts and the fact that Venezuela’s recent crude oil production had been relatively modest (less than one million barrels per day) “suggest that the impacts on the price of oil and that of other assets will be very limited for the moment,” agree the market analysis consultancy MacroYield.