IS THIS THE POINT OF NO RETURN FOR MADURO? | WHAT REALLY HAPPENED

IS THIS THE POINT OF NO RETURN FOR MADURO?

Things have certainly moved into a higher gear in Venezuela, with a genuine diarchy vying for control over the country’s resources and populace. The alleged smuggling of gold reserves, politicized humanitarian aid, rampant disinformation against the background of all-encompassing poverty and deprivation – Venezuela of 2019 bears an uncanny likeness to any stereotypical conflict-ridden Latin American country of the 20th century.

The US sanctions announced January 28 have driven a wedge between PDVSA and the United States, creating a point of no return for President Maduro. There is still no 100 percent certainty that Maduro will be ousted and if he manages to stay (through which, given his political skills and occasional antics, would be tantamount to a miracle), Venezuela could rethink its oil strategy on a grand scale. Let’s, however, look at the developments in Venezuela piece by piece before we jump into any conclusions.

The most evident and palpable consequence of the US sanctions was the almost immediate cessation of activity with US Gulf Coast refiners. The US Treasury has stated that under President Maduro PDVSA has become a “vehicle for embezzlement and corruption” and hence from January 28 onwards all income from the sales of Venezuelan crude should be transferred to escrow accounts in the United States, accessible only by the Guiadó government. Given that PDVSA has been a vehicle for embezzlement every single year of its 43-year old history, it is remarkably naive to believe a transfer of control from Maduro to Guaidó would bring about any structural shift, however, the severeness of the punishment brings across a powerful political message – a message that US refiners cannot shrug off easily.

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