Note: Russia is on vacation this week so the Kremlin will probably use that as a reason not to make any quick commentary or to issue an official reaction, beyond what has been already stated.

The US action in Venezuela will have an impact on the peace process in eastern Ukraine. But exactly how is unclear at this stage.

Moscow may take the view that Washington is doing exactly what the Kremlin has been saying it is justified in doing and, therefore, does not need to compromise and can continue to pursue objectives on the battlefield.

The US military now has a new theater of operations and is becoming more strategic. Trump may therefore escalate the level of threats and incentives (to both Kyiv and Moscow) in order to force an end to the conflict (and to free US military resources) or he may decide to reduce involvement and let both sides continue to fight

The US action exactly fits what was set out in the revised US National Security Strategy. That document emphasized the importance of regional security (economic and trade as much as military) and has been interpreted as meaning the US also accepts that other countries have similar security priorities in their “near abroad”

The action will strengthen Moscow and Beijing’s resolve to strengthen the role of the BRICS group and to expand membership within the Global South. More countries are now likely to be interested in membership.

The price of oil should not be impacted over the short to medium term. Even longer term there are major question marks over exactly much investment the Venezuelan oil industry can attract because of the huge environmental issues and the fact the oil is very heavy crude and not a competitor for most of existing oil trade.

Fits with the revised US National Security Strategy

The Kremlin is unlikely to be overly concerned or annoyed about the US action. It has been expected and fits with the recently updated US National Security Strategy. That update focused much more on regional security for the US and an end or easing of the existing rose as a sort of global policeman and picking up most of the cost. In the document, the Trump Administration advised Europe to make peace with Russia and to “get along” with its big neighbor.

The commentary in Moscow in December was that the US was effectively saying that the Americas were its area of strategic interest (its “near abroad” to use Russia’s description of the Eurasia region) and that it accepted that other strong countries also had their areas of strategic interest. That, according to Moscow’s interpretation (or hopeful assumption) means that:

• Russia has a strategic interest in eastern Ukraine and in the Caucasus and Central Asia; and
• China has a strategic interest in Taiwan (it can hardly be a coincidence that China launched such a large military exercise around Taiwan shortly after the updated National Security Strategy was issued.

Similarly, Saudi Arabia demanded the UAE withdraw its military from Yemen last week. That is also hardly a coincidence as Riyadh always stated that Yemen should be part of Saudi controlled territory. Saudi must also be looking at the strategic location of Yemen (Gulf of Aden and the Bab-el-Mandeb Straits) at the entrance to the Red Sea. Saudi clearly wants control of a region which is very important for its trade routes.

The Saudi Arabian demand (to the UAE) also comes (not coincidentally) after Israel’s recognition of Somaliland Independence (December 26). The country is also a littoral state on the Gulf of Aden and an important access route for Isael’s Port of Aqaba. That declaration brought a swift condemnation from Turkey also. Ankara has its own ambitions in the region and for sure does not want Israel to have a stronger regional role, especially with US support.

What may it mean for the Ukraine-Russia?

There are a number of possible outcomes. Discussions in Paris today and later with the US side will start to give some guidance:

the rough US rhetoric has not changed and nor is it expected to change.

Trump wants an end to the conflict, especially now that the US military has a new focus (Columbia, Venezuela and Cuba) and will need to use more resources and intelligence coverage. This is in addition to the long-term full support for Israel and resources to contain China in the Pacific. If there is a military escalation in Yemen and in the Gulf of Aden (Iran will hardly sit ideally by) then this too will require resources, as is the continuing monitoring of Iran.

The US military and political resources cannot cover everything so we may well see a bigger effort (more specific threats and incentives directed at both Kyiv and Moscow to force compromises) from the Trump Administration to end the conflict in eastern Ukraine.

On the other hand, Moscow may very well be encouraged by the US action in Venezuela (plus the very specific threats to Columbia and to Cuba) and Trump’s acknowledgement of US “approval” of the elected governments in Argentina, Chile and Honduras. One official has already asked how the US can criticize Russia for defending its interests in its near-abroad when Washington is so blatantly doing exactly the same?

In this case, Moscow may take the view that Washington will be less committed to Ukraine, and the risk of further sanctions has eased, so it does not have to make compromises in key areas (territory especially) and can continue to militarily grind forward and take ground by force.

The ramp-up in oil sanctions (October against Rosneft and Lukoil) late last year may be interpreted as a warning shot, signalling that escalation is possible, just as sinking Venezuelan vessels was a warning shot to Maduro, who chose to ignore them. The sense is that Putin is more or less doing what Trump wants him to, as US actions seem focused on getting Ukraine and Europe to shift their positions rather than getting Putin to do the same or, at least not materially. Otherwise, Trump would probably be ramping up the sanctions against Russia to get Putin to shift his positions. 

Another possible outcome is that Kyiv and the European leaders also take the view that the US may walk away from the peace process or may start to wind down military support (especially battlefield intelligence support) and therefore, there may be more incentives to compromise (in favor of Moscow demands) so as to keep US support and involvement?

From a Russian point of view, they could argue that their investments in Venezuela are damaged by Trump’s action, so they want something in return, i.e. a quid pro quo in Donbass?

What does this do to BRICS?

The obvious answer is that the US action is much more likely to strengthen BRICS and help expand membership. Washington has demonstrated it is now much more focused on regional security (military, narcotics, economics, trade. etc.) and, perhaps, as a consequence, much less interested in building relations with the rest of the world. Instead, using the treat of tariffs to being others “into line”

This will strengthen the position of Moscow and Beijing which is that the “West” (principally the US but also a currently weak Europe) is only interested in what is in its best interest and in the global good. Hence other nations – especially in the so-called Global South – need to stand and work together and to have a stronger voice to protect and promote their common interests.

Another fairly clear message from Washington to the Eurasian leaders (Caucasus and Central Asia) is that America will be their friend only as long as they are toeing the Trump line, which seems to mainly be about guaranteeing critical minerals supply to US processors, and presumably not sending them to China. Being invited to the G20 is not nothing, but if all that Trump is offering is the stick and no carrot, then these countries may decide they are better off depending more on Russia and China.

What about the oil price?

The impact – of the US action in Venezuela - should have little, short to medium term impact. Venezuela does indeed have the world’s largest oil reserves but of a very heavy crude oil. It would take many years of investment (repairing existing damage and neglect plus expansion) to increase export volumes. But the important considerations are:

The oil is under the Orinoco River Basin, a hugely sensitive environmental area. Any oil major or any bank that gets involved in any effort to develop these resources will be accused of damaging the environment and will again (it happened before) face major criticism and protests from environmental groups

The oil is very heavy, so the customer base is relatively limited. Refineries now processing, e.g. Middle East oil, cannot quickly or cheapy switch to heavy oil

There will be considerable uncertainty about political stability, and therefore investment risk, in the region for many years (e.g. what happens when Trump leaves office?) and that also will curb any investment enthusiasm for some time