The West is playing a dangerous game with Venezuela
Just weeks ago, in a potentially deliberate attempt to echo the 1980s, the UK government dispatched HMS Trent to the waters off the coast of Guyana – its former colony and an emerging geopolitical hotspot.
Despite limited resources, the UK has demonstratively come to Guyana’s aid as the smaller nation wrestles with Venezuela over Essequibo, an oil rich region long disputed by the Venezuelan government.
Regardless of the UK’s intentions, this dispute better reflects the seemingly never-ending scope for confrontation between Venezuela and the US – the latter holding major interests in Guyana’s nascent energy sector.
While the topic has changed, the background music remains the same. Venezuela insists that its economic and territorial sovereignty are respected; the US and its allies want a more compliant, reformist Venezuela.
Despite decades of tension, the two sides are connected by mutual self-interest in one area in particular: energy.
Russia’s invasion of Ukraine exposed Europe’s dependence on the Putin regime and even the oil-producing US faced a period of sticky inflation as global energy markets seized up.
In search of relief, the West watered down a number of its sanctions on the Venezuelan oil industry last November. But now this mutual self-interest has been shunted to one side – a volte face brought on by the US’s response to a referendum held in Venezuela on 3rd December.
The referendum, though non-binding, demonstrated overwhelming public support for Venezuela’s long-standing claim over Essequibo, 61,600-square-miles of land running parallel to its eastern border.
Guyana, which currently administers Essequibo, was panicked by the result. The government of President Irfaan Ali soon called on the international community to intervene to underwrite its claim to the territory – even though this very claim is still under close scrutiny at the International Court of Justice (ICJ).
The US responded with its own warning to Venezuela to stay out of Essequibo, reflecting an explicit endorsement of the sole former-British colony in South America.
Since the discovery of Guyana’s mineral wealth in 2015, a comforting narrative has emerged that Guyanese oil will soon cure Europe of its energy woes.
The reality is not quite so rosy. In fact, the Guyanese fossil fuel industry pales into something like insignificance when compared to Venezuela.
When it comes to oil, Venezuela has the largest proven oil reserves in the world, equal to approximately 300 billion barrels - comfortably ahead of Saudi Arabia (276 billion) and twenty-seven times greater than those of Guyana (11 billion).
While old hands in the energy industry are clear that ‘peak oil’ is much further off than originally hoped, markets are putting a premium on so-called ‘bridging fuels’ that can, well, bridge the gap between now and a future state where renewable energy dominates the mix.
Liquified natural gas (LNG), which is less polluting than oil and readily transportable, is most sought after in this regard. Unfortunately for the US and Europe, it is the latter nation which is LNG ascendant.
Venezuela’s natural gas reserves total 5,500 billion cubic meters (BCM). Guyana’s stocks are much more limited and, at present, are not available for export let alone liquification.
While the West seems to have cut off its nose to spite its face, this isn’t a question of global leaders getting their sums wrong. Instead, the current Venezuela policy is a clearcut case of politics and perhaps political ideology winning out against economic reality.
However, a landing zone exists on which Europe can secure its supplies, Venezuela’s economic rejuvenation can continue apace, and the US can avoid entanglement in another foreign conflict.
As mentioned, the Essequibo dispute is being heard by the ICJ. Though this will only deal with the terrestrial disputes brought forward by Guyana (an admission in itself that the territory is under dispute) and not the maritime ones. The impact on maritime borders will be influenced by who owns the coastline.
At the same time, the governments of Guyana and Venezuela have agreed to engage in bilateral talks to discuss where the border lines between the two nations should be drawn.
Rational observers should hope that the court’s ruling goes some way to assuaging Venezuela’s longstanding claim to the region, while protecting Guyana’s nascent energy industry.
This would represent a problem solved for the West. It could also provide a basis for a more pragmatic relationship with Venezuela where mutual self-interest trumps historic suspicion and military grandstanding.
Peter Burdin is the BBC's former World Assignments Editor.
