Balance of Powers: Venezuela
Topic B: International Affairs & Oil
Diplomacy
Chair: Michael McCarthy
Moderator: Janesh Rahlan
Vice Chair: Sofia Rivera
April 10 – 13, 2014
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International Affairs and Oil Diplomacy
Introduction
The international affairs of Venezuela began with historical land disputes resulting from
European imperialism in late 19th and early 20th century South America. In 1831, Venezuela split
from Gran Colombia—a federal republic that covered modern day Venezuela, Colombia, Ecuador,
Peru, and Panama. Although the republic split peacefully, it created two major territorial disputes
with Colombia and Guyana. Those disputes have caused problems to this day between Venezuela
and its neighbors, although the country has maintained good relations with most of South America
during the 20th century. Venezuela also had a positive relationship with the United States
throughout the 20th century and up until the election of Hugo Chávez in 1998.
Venezuela’s importance in international politics has grown since the late 20th century as the
country became a major oil exporter and elected Hugo Chávez, an outspoken socialist leader, as
president in 1998. Venezuela is one of the founding members of OPEC and the 5th largest oil
producer in the world, which is especially important considering the security and stability issues that
plague the oil-rich Middle East. However, Venezuela’s growing importance grew to become a thorn
in the side of the United States. Chávez, in particular, angered the US and the West during his
presidency by forming strong ties with Russia, interacting frequently with Iran and wielding antiWestern rhetoric in his political speeches, all while promoting and spreading socialism in Latin
America.
Now, Venezuela faces new problems in international relations. Since 2013, its economic
situation has not placed Venezuela in a powerful condition internationally, particularly when it
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comes to trade negotiations. The devalued bolívar has caused crises in supermarkets and factories
alike. Yet, Venezuela’s state-controlled oil prices remain the lowest in the world. The country’s
continued economic instability has and will continue to cause internal and external political
problems. One such example can be evidenced in the country’s involvement in new diplomatic
squabbles with the U.S. The nation has been sanctioned for its exports to Iran, but it also relies on
the revenues of U.S. businesses operating within its borders. Venezuela’s history of geographic
challenges and disputes along with its recent oil revenues and the continuing problems of the
Bolivarian Revolution leave several issues open in the arena of international affairs.
Background & Current Situation
The Venezuela Crisis of 1895
Venezuela’s 1831 split from Gran Colombia set off a series of territorial disputes and
diplomatic crises in South America, some of which persist to the present day. In 1895, the United
States intervened under the Monroe Doctrine in a long-standing territorial dispute between
Venezuela and Britain over “British Guiana” as part of a series of tense confrontations called the
Venezuela Crisis of 1895. Venezuela asked the United States to intervene against British imperialism,
even though the United States’ influence was not directly threatened by the dispute. Americans
claimed that the Monroe Doctrine, which sought to protect South America from European
imperialism, forced the United States to intervene in the diplomatic affairs of South American states,
even when no military threats from Europe were present. Britain questioned the United States’
involvement.
The dispute ended when arbitrators ruled in favor of Britain’s claims without giving much
justification for their verdict. However, the crisis remains an important point in U.S. and Venezuelan
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history because it is the first example of the expanded usage of the Monroe Doctrine motivating the
United States’ interventionist policy in the Western Hemisphere.1 Although the Monroe Doctrine is
associated with U.S. protectionism, historians do not generally see this as a case of unwanted U.S.
intervention. Rather in this context, the United States came to the aid of and supported Venezuela’s
sovereignty and land claims. The invocation of the doctrine in this case demonstrated, at the time,
peaceful and friendly diplomatic relations between the United States and Venezuela.
Despite a lack of discussion on the topic for decades, the dispute continues to be a problem
in the present day. However, relations between the United States and Venezuela have significantly
worsened. In October 2013, an otherwise tense month for U.S.-Venezuelan relations in which
Venezuela expelled American diplomats, Venezuelan authorities blocked an oil research vessel in
territorial waters off the coast of Guyana and arrested the crew onboard, five of whom were
American.2 The ongoing dispute over land also covers oil drilling rights in coastal waters and it is
just one of a few persistent diplomatic problems that Venezuela must resolve.
Border Disputes
The oldest and least likely to be resolved of these problems are Venezuela’s territorial
disputes with Colombia and Guyana. Venezuela’s eastern border with Guyana has been disputed
since the late 19th century. While much of the world recognizes the Guyana Esequiba territory—
1
Venezuelan Boundary Dispute - Milestones. Office of the Historian, U.S. Department of State.
https://history.state.gov/milestones/1866-1898/venezuela.
2
Neuman, William. “Venezuela Intercepts Ship with 5 Americans Aboard.” The New York Times. 11 October 2013.
http://www.nytimes.com/2013/10/12/world/americas/venezuela-intercepts-ship-with-5-americansaboard.html?ref=venezuela&_r=0.
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which makes up most of the territory claimed by the nation of Guyana—as land under the legal
authority of Guyana, Venezuela considers the territory to be its own. The U.S. advocated for
Venezuela in an arbitration process that U.S. officials negotiated with Britain. Britain chose two
arbitrators on its behalf and the U.S. Supreme Court chose two arbitrators on behalf of Venezuela.
Both parties decided that a fifth arbitrator from an independent background would be beneficial and
chose a Russian diplomat. These five arbitrators decided in favor of Guyana. However, Venezuela
felt it was not represented by the American arbitrators and did not accept the ruling. When Guyana
gained its independence from Britain in 1966, both Guyana and Venezuela signed a treaty promising
to solve the issue in the future. Since then, no agreement has been reached.
On the other side of the nation, Colombia disputes Venezuela’s claim over the Gulf of
Venezuela and claims that Venezuela harbors the Revolutionary Armed Forces of Colombia (FARC)
militants, allowing the group—which Colombia has designated as a terrorist organization—to escape
Colombian authorities. The territorial claim is left over from the split of Gran Colombia into several
current independent South American countries. While the land border between Colombia and
Venezuela was resolved in 1941, the dispute over territorial waters in the gulf continues. The Gulf of
Venezuela is particularly important for Venezuela’s oil industry because it connects the oil fields of
Lake Maracaibo to the ocean. According to an oil industry company, offshore drilling in the gulf has
uncovered one of the largest sources of oil and natural gas in the world, the Perla field. Venezuela
has the largest proven oil reserves in the world.3 If Venezuela lost its claimed territory in the gulf, it
could stand to lose a considerable portion of its oil reserves to Colombia. Tension between the two
countries is also attributed to issues along the established land border. A great international concern,
3
“OPEC Share of World Crude Oil Reserves.” Organization of Petroleum Exporting Countries. 2012.
http://www.opec.org/opec_web/en/data_graphs/330.htm.
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drug traffickers are known to smuggle drugs and other illicit goods from Colombia through
Venezuela.
Oil Diplomacy
Venezuela’s abundant oil reserves combined with national control of the oil industry and
influential position in OPEC allow the government to use the prospect of cheap oil for its South
American neighbors as an act of diplomacy. “Oil diplomacy”, simply put, is a form of economic aid,
with an implied diplomatic purpose. Support to neighboring countries is either funded by oil
revenues or offered through oil subsidies agreed upon by the countries involved.
In the early 2000s, Chávez implemented a foreign policy plan that included oil as a form of
aid or exchange with Venezuela’s neighbors. While Chávez insisted he was simply helping his
neighbors, his critics, especially those in the United States, claimed that he used cheap oil to sway
Venezuela’s neighbors away from U.S. foreign aid.4 Chávez was in a unique position at the time to
influence South America with his anti-globalization agenda. More recently, Venezuela’s currency has
lost value and its ability to provide cheap oil to its neighbors, much less to its citizens, is in question.
The Chávez and Maduro governments have intentionally devalued Venezuela’s currency to increase
the price of exports
Venezuela has good reason to support its neighbors through oil diplomacy. A report in the
Journal of International Service finds that oil diplomacy has some effect on the voting patterns of its
recipients in the UN. The countries to which Venezuela has offered cheap oil or economic support
tend to vote more similarly with Venezuela in the United Nations General Assembly now than they
4
Harman, Danna. “Chávez seeks influence with oil diplomacy.” The Christian Science Monitor. 25 August 2005.
http://www.csmonitor.com/2005/0825/p01s04-woam.html.
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did in the past.5 Venezuelan oil diplomacy has been used as an effective tool that enables Venezuela
to build a powerful bloc of leftist and left-leaning South American states in the UN and other
international organizations, but can only continue if Venezuela can afford such measures.
Relations with Colombia
Venezuelan-Colombian relations nearly became dire in August 1987. On August 9th, a
Colombian vessel entered the Gulf of Venezuela, the ownership of which has been in dispute for
decades. Even though it is claimed by both Venezuela and Colombia, the gulf is normally patrolled
by Venezuela, which took offense to the Colombian ship. In response to the crossing, Venezuela
increased military presence along the Colombian border and voiced its anger over the action through
diplomatic channels.6 Both sides appear to have mobilized their militaries, but the crisis quickly
cooled without aggression from either side.
In 2010, Colombia’s accusations that Venezuela was harboring Colombian rebels, including
the FARC, led to an end of diplomatic ties. The countries had suspended bilateral trade one year
prior. The suspension of ties coincided with increased military presence on the border and threats of
war from Chávez.7 Colombia has presented its claims and evidence to the Organization of American
States, and there are reasons to believe that Colombia’s arguments are reasonable.8 In the political
sphere, some thought Colombia’s outgoing president, Alvaro Uribe, could have made the
5
Poertner, Mathias. “Venezuela Oil Diplomacy and Voting in the U.N. General Assembly.” Journal of International Service.
Spring 2011. http://www.american.edu/sis/jis/upload/6Poertner.pdf
6
Riding, Alan. “Two Claims of Territory Roil Waters in Gulf of Venezuela.” The New York Times.
http://www.nytimes.com/1987/08/28/world/two-claims-of-territory-roil-waters-in-gulf-of-venezuela.html
7
Carrol, Rory. “Hugo Chávez breaks diplomatic ties between Venezuela and Colombia.” The Guardian. 22 July 2010.
http://www.theguardian.com/world/2010/jul/23/hugo-chavez-breaks-diplomatic-ties-venezuela-colombia
8
See Editorial: “Colombia proves again that Venezuela is harboring FARC terrorists.” The Washington Post. 30 July 2010.
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/29/AR2010072905211.html
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accusations as a political hit to either Chávez or his successor. In the end, Uribe’s successor, Juan
Manuel Santos, and Chávez worked to repair diplomatic relations between Colombia and Venezuela.
The extradition in November of a drug trafficker caught in Colombia and wanted in Venezuela to
the Venezuelan authorities rather than to the United States, which had also charged the man,
signaled improved relations between Colombia and Venezuela.9 Venezuela has often clashed with
Colombia’s efforts to work with the United States because Venezuelan leaders look down on a U.S.
presence in South America.
Relations with the United States
Following accusations by Maduro that U.S. diplomats were scheming to sabotage
Venezuela’s electric grid, Venezuela expelled top diplomats from the U.S. embassy in Caracas in late
September 2013 and again in February 2014. The U.S. followed suit in October 2013, expelling
Venezuelan diplomats from Washington.10 This diplomatic falling out is demonstrative of the
deterioration in relations that has occurred since the late 1990s. These actions, while believed to be
beneficial by the Venezuelan government, could be destructive to the Venezuelan economy. The
International Affairs Review of George Washington University points out that despite having a good
trade relationship—there are more than 500 U.S. companies doing business in Venezuela, poor
diplomatic relations and the erosion of economic stability in Venezuela could be problematic for
American companies.
9
CNN Wire Staff. “Colombia: Suspected drug lord will be sent to Venezuela, not U.S.” CNN. 16 November 2010.
http://www.cnn.com/2010/WORLD/americas/11/16/colombia.extradition/
10
The Associated Press. “Venezuela dispute: US expels three diplomats in retaliation.” The Guardian. 1 October 2013.
http://www.theguardian.com/world/2013/oct/02/venezuela-us-expels-diplomats-retaliation
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However, the publication also calls this moment a “key opportunity” for the United States to
improve relations with Venezuela. The U.S. could use the large presence of American corporations
in Venezuela to their advantage in diplomatic negotiations.
Venezuela’s recent foreign agenda has alienated the United States and “the West” because of
concerns about the security of oil imports, lingering tensions with Russia, and nuclear concerns with
Iran. Currently, Venezuelan oil accounts for
about 11% of U.S. crude oil imports11, but
security concerns in the Middle East may drive
up the appeal of other sources of oil for the U.S.,
such as from South America. The United States is
still heavily involved in fighting in the Middle
East, including its presence in Afghanistan and its
drone strikes in Yemen and Pakistan, among others. These military engagements open the U.S. to
threats to restrict access to oil from the region.
U.S. relations have suffered greatly since the 2013 presidential elections in Venezuela. Citing
Henrique Capriles’ demand for an audit of all ballots, the United States initially refused to recognize
Nicolas Maduro as the elected leader of Venezuela and says it will not do so until a full audit is
conducted. Amid protests in February 2014 that resulted in several deaths, Venezuelan authorities
expelled 3 American diplomats, claiming the diplomats incited student protesters.
Relations with Iran
11
Calculated using data available from the U.S. Energy Information Administration. U.S. Imports of Crude Oil. 27
September 2013. http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRIMUS2&f=A.
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The West is most concerned with Venezuela’s ties to Iran. The former leaders of both
countries, Chávez and Ahmadinejad, shared their opposition to U.S. imperialism. Both countries are
members of OPEC and a deep trading relationship with each other. Iran’s Latin American interests
have led Washington to investigate the Islamic Republic’s activities in South America.12 Politicians
in the U.S., especially Republicans, are concerned that Iran is partnering with Venezuela to arm
South America. The United States has a large defensive military presence in South America, but
could be threatened by weapons imported from Russia and Iran.
Another thorn in the side of the U.S., oil export sanctions against Iran have apparently led
Venezuela to replace the amount of oil Iran used to export. Just 2 years ago, Iran used to be a top
exporter to India and China, but international sanctions against the Islamic Republic resulted in
fewer exports to those countries. Under the sanctions, Venezuela has taken advantage of Iran’s
disadvantage and moved up in the ranks of major exporters to these countries.13 With Iran and
Venezuela sharing their disdain for U.S. interventionism and an interest in developing greater
military capability, the U.S. is rightly concerned about the diplomatic interactions between Venezuela
and Iran.
In a great visual of Iran’s partnership with Venezuela, then-President Ahmadinejad of Iran
was photographed hugging the mother of Hugo Chávez at the late Venezuelan leader’s funeral.14
The “scandal” was not one typical of U.S. media, but a concern from Iran’s Muslim clerics that the
Iranian leader’s actions were inappropriate—his hug was not allowed for an unmarried man and
12
Rotella, Sebastian. “The Terror Threat and Iran’s Inroads in Latin America.” ProPublica.
http://www.propublica.org/article/the-terror-threat-and-irans-inroads-in-latin-america.
13
Blas, Javier. “Venezuela fills void left by Iranian oil export sanctions.” Financial Times. 13 June 2013.
http://www.ft.com/cms/s/0/47e7fad8-cdc3-11e2-8313-00144feab7de.html#axzz2tXbfHhy4.
14
Huus, Kari. “Ahmadinejad’s scandalous moment with Hugo Chavez’s mother.” NBC News. 11 March 2013.
http://worldnews.nbcnews.com/_news/2013/03/11/17272211-ahmadinejads-scandalous-moment-with-hugo-chavezsmother?lite.
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woman. Whether or not Ahmadinejad made a calculated effort to show his support for Chávez, he
certainly showed great respect for Venezuela and Venezuelans. The scandal is important
symbolically and its message of support is critical to understanding Venezuelan-Iranian relations.
Relations with Russia
Both diplomatic and economic relations between Russia and Venezuela are strong.
According to Russian president Vladimir Putin, Venezuela’s business ties with Russia have
contributed to the exchange of $2 billion in total trade between the two countries.15 The most
important agreements are between large oil companies of each country, who have partnered to
expand offshore oil drilling. Russian banks have also financed further oil exploration in Venezuela.
However, Russian-Venezuelan relations are not restricted to oil. Venezuela also has interests in
buying Russian weapons and military equipment. In 2009, Hugo Chávez negotiated a deal to buy
short-range missiles from Russia. Although Chávez claimed the missiles would be strictly used for
defense purposes, they could reach locations in Colombia and U.S. military bases.16
In an October 2013 trip to promote the sale of Russian military goods in Latin America,
Russian officials skipped over Venezuela. The trip, which included Brazil and Peru, suggests that
Russia views South America as a valuable customer for its weapons and military products.17 Despite
15
“‘Inherited love’: Russia - Venezuela economic ties to remain tight, mutual investment plans estimated at $20 bn.” RT.
2 July 2013. http://rt.com/business/russia-venezuela-energy-finance-545/.
16
Romero, Simon. “Venezuela Says it Will Buy Russian Missiles.” The New York Times. 12 September 2009.
http://www.nytimes.com/2009/09/13/world/americas/13venez.html?ref=venezuela
17
Sanchez and Kowalski. “WEAPONS DIPLOMACY: RUSSIAN DEFENSE MINISTER SKIPS VENEZUELA
DURING LATIN AMERICAN TOUR.” Council on Hemispheric Affairs. 11 November 2013.
http://www.coha.org/weapons-diplomacy-russian-defense-minister-skips-venezuela-during-latin-american-tour/
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the snub, experts have said that relations between Russia and Venezuela are not in trouble and that
there are a number of other reasons why Russia would skip over Caracas in its campaign.
Bloc Positions
Maduro supporters are Chavistas that support the aims of the Bolivarian Revolution and by
extension the foreign policy that has been inherited from Chávez. They are against U.S. imperialism
in South America and are open to partnerships with states that also object to American and Western
hegemony in global affairs. For Chavistas, oil is a lifeline for Venezuela that supports the
government’s programs for the poor and its foreign policy agenda.
The opposition’s presidential candidate, Henrique Capriles, does not support diplomatic ties
with Iran. Capriles also seeks a repaired relationship with the United States. As a candidate, he stated
he would like to shift Venezuelan foreign policy away from promoting worldwide revolution. The
opposition does not support Chávez’s goal of spreading the Bolivarian Revolution to its neighbors
and globally. Therefore, the opposition does not support the underlying tools, such as oil diplomacy
as it is currently used, for supporting a Bolivarian Revolution throughout South America.
Questions to Consider
1. How can oil diplomacy continue in Venezuela’s current economic position? Should it
continue?
2. Moreover, how can Venezuela maintain its global influence post-Chávez?
3. Which issues should take priority in Maduro’s diplomatic agenda?
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4. What are the benefits in resolving long-standing territorial disputes? Can these disputes
ever be solved?
5. How should Venezuela address the United States? Would it benefit from improving its
relations with the U.S.?
Recommended Sources
Times Topics - Venezuela
http://topics.nytimes.com/top/news/international/countriesandterritories/venezuela/
BBC - Timeline: Venezuela
http://news.bbc.co.uk/2/hi/americas/country_profiles/1229348.stm
Embassy of the Bolivarian Republic of Venezuela
http://venezuela-us.org/
U.S. Department of State - Relations with Venezuela
http://www.state.gov/r/pa/ei/bgn/35766.htm
Bibliography
The Associated Press. “Venezuela dispute: US expels three diplomats in retaliation.” The Guardian. 1
October 2013. http://www.theguardian.com/world/2013/oct/02/venezuela-us-expelsdiplomats-retaliation
Blas, Javier. “Venezuela fills void left by Iranian oil export sanctions.” Financial Times. 13 June 2013.
ft.com/cms/s/0/47e7fad8-cdc3-11e2-8313-00144feab7de.html#axzz2tXbfHhy4.
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Carrol, Rory. “Hugo Chávez breaks diplomatic ties between Venezuela and Colombia.” The
Guardian. 22 July 2010. http://www.theguardian.com/world/2010/jul/23/hugo-chavezbreaks-diplomatic-ties-venezuela-colombia
CNN Wire Staff. “Colombia: Suspected drug lord will be sent to Venezuela, not U.S.” CNN. 16
November 2010.
http://www.cnn.com/2010/WORLD/americas/11/16/colombia.extradition/
“Colombia proves again that Venezuela is harboring FARC terrorists.” The Washington Post. 30 July
2010. http://www.washingtonpost.com/wpdyn/content/article/2010/07/29/AR2010072905211.html
Harman, Danna. “Chávez seeks influence with oil diplomacy.” The Christian Science Monitor. August
25, 2005. http://www.csmonitor.com/2005/0825/p01s04-woam.html.
Huus, Kari. “Ahmadinejad’s scandalous moment with Hugo Chavez’s mother.” NBC News. 11
March 2013. http://worldnews.nbcnews.com/_news/2013/03/11/17272211-ahmadinejadsscandalous-moment-with-hugo-chavezs-mother?lite.
“‘Inherited love’: Russia - Venezuela economic ties to remain tight, mutual investment plans
estimated at $20 bn.” RT. 2 July 2013. http://rt.com/business/russia-venezuela-energyfinance-545/.
Neuman, William. “Venezuela Intercepts Ship with 5 Americans Aboard.” The New York Times. 11
October 2013. http://www.nytimes.com/2013/10/12/world/americas/venezuelaintercepts-ship-with-5-americans-aboard.html?ref=venezuela&_r=0.
Poertner, Mathias. “Venezuela Oil Diplomacy and Voting in the U.N. General Assembly.” Journal of
International Service. Spring 2011. http://www.american.edu/sis/jis/upload/6Poertner.pdf
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Riding, Alan. “Two Claims of Territory Roil Waters in Gulf of Venezuela.” The New York Times.
http://www.nytimes.com/1987/08/28/world/two-claims-of-territory-roil-waters-in-gulf-ofvenezuela.html
Romero, Simon. “Venezuela Says it Will Buy Russian Missiles.” The New York Times. 12 September
2009. http://www.nytimes.com/2009/09/13/world/americas/13venez.html?ref=venezuela
Rotella, Sebastian. “The Terror Threat and Iran’s Inroads in Latin America.” ProPublica.
http://www.propublica.org/article/the-terror-threat-and-irans-inroads-in-latin-america
Sanchez and Kowalski. “WEAPONS DIPLOMACY: RUSSIAN DEFENSE MINISTER SKIPS
VENEZUELA DURING LATIN AMERICAN TOUR.” Council on Hemispheric Affairs. 11
November 2013. http://www.coha.org/weapons-diplomacy-russian-defense-minister-skipsvenezuela-during-latin-american-tour/
U.S. Energy Information Administration. “U.S. Imports of Crude Oil.” 27 September 2013.
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRIMUS2&f=A.
“Venezuelan Boundary Dispute - Milestones.” Office of the Historian, U.S. Department of State.
https://history.state.gov/milestones/1866-1898/venezuela.
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