Trump, Venezuela, the ‘New Global Cold War’ and its implications

The world is witnessing a dramatic reshaping of geopolitical dynamics, driven largely by the assertive policies of US President Donald Trump. His administration has sought to redefine the global order through strategic interventions, economic recalibrations, and a reassertion of American influence across multiple regions - from Latin America to the Indo-Pacific — with potential repercussions for South Asia. Central to Trump’s worldview is the belief that US systems of governance and finance set global standards, and that the country must actively shape international structures to advance its interests.

This approach is nowhere more visible than in the unprecedented US intervention in Venezuela on 3 January. In a bold operation, the US forces launched strikes in and around Caracas and captured Venezuelan President Nicolás Maduro and his wife, Cilia Flores, transporting them to New York to face federal charges, including narco‑terrorism and drug trafficking. The operation, which the Trump administration justified as part of broader efforts against drug trafficking and corruption, represents Washington’s most direct military action in Latin America in decades. Friday, Trump said that Venezuela has begun releasing political prisoners and cooperating with the US on rebuilding its oil and gas sector, and hence, a second wave of attack on the country is ‘not needed’.

However, the implications of this intervention extend far beyond Venezuela’s borders, affecting global energy markets, international relations, and strategic competition in regions like the Indo‑Pacific and South Asia. While some US policymakers frame the action as a necessary response to transnational criminal networks and governance failures, legal experts and many world leaders argue it violates core principles of sovereignty and international law, raising questions about precedent and global norms, but for the US, the Western hemisphere has to work cordially, as the other regional powers do.

In Latin America and beyond, reactions have been sharply divided. Several nations condemned the strikes at United Nations meetings, calling them a breach of international norms and a “crime of aggression.” Others have expressed concern about the long‑term stability of the region.

The Venezuela intervention is generating intense debate about its broader implications—particularly regarding how great powers manage territorial disputes and the use of force. Some observers have drawn parallels, rhetorically or in commentary online, between this US action and potential flashpoints elsewhere, including cross‑Taiwan Strait tensions.  China’s position on Taiwan is rooted in long-standing political doctrine and domestic legal frameworks emphasising peaceful reunification; Beijing’s official policy asserts Taiwan as part of China and rejects external interference, yet it consistently prioritises economic development and strategic stability over initiating large‑scale military conflict. There is no credible indication that China is preparing to launch an outright war over Taiwan in the near term, and serious conflict would entail enormous political and economic risks for Beijing.

‘America First’ rules-based order and visit of Wang Yi tomorrow (12)

Trump’s approach builds on the concept of a ‘rules-based international order,’ a principle the US has promoted for decades, and one that has been strongly emphasised since he came to power. Under this framework, countries are expected to operate within established norms regarding trade, investment, and security. In recent years, pressure has increased as Trump scrutinised how American resources and capital were utilised globally. This order prioritises American values, even in smaller nations like Sri Lanka, and has historically meant aligning with global partners to promote transparent governance, economic fairness, and political accountability.

The outgoing US Ambassador to Sri Lanka, Julie Chung, repeatedly emphasised the importance of maintaining a level playing field for foreign investors. Indirectly warning against over-reliance on a single partner-implicitly China-she stressed that countries supporting Sri Lanka’s growth should enjoy equal access to economic opportunities. She also underscored that all strategic partners have contributed to Sri Lanka’s development.

On 8 January, the US announced its awarding 10 H-57 (Bell 206 Sea Ranger) Helicopters to the Sri Lanka Air Force at no cost for the equipment itself. Manufactured in Texas and known for their reliability, the Helicopters are being transferred under the Excess Defence Articles (EDA) Programme, with delivery expected in early 2026. Ambassador Chung noted that a crisis such as Cyclone Ditwah highlights the critical role Helicopters play in search and rescue operations. The Aircraft will strengthen the Air Force’s fleet and enhance pilot training, improving disaster response capabilities, she tweeted.

However, the US government has withdrawn from the Colombo Plan Council, listing it in its latest directive on withdrawing from international organisations, conventions, and treaties. The memorandum explicitly states that the Colombo Plan Council no longer aligns with US interests, projecting a shift in Washington’s engagement with certain multilateral development frameworks.

This is the broader US strategy in the Indo-Pacific, which seeks to counter Chinese influence through both diplomacy and alternative frameworks such as the Quad—a strategic grouping of the United States, India, Japan, and Australia. The Quad promotes a ‘Free and Open Indo-Pacific’, advocating transparency, security cooperation, and adherence to international norms, while implicitly encouraging regional States to maintain balanced relationships between competing powers.

For Sri Lanka, navigating this environment requires a delicate balancing act. The island nation maintains strong historical, geographic, and security ties with India while simultaneously leveraging large-scale Chinese financing for critical infrastructure, including Hambantota Port and Colombo Port City. The USD 3.7 billion oil refinery project with China’s Sinopec — a 200,000-barrel-per-day facility near Hambantota — is expected to be a key topic when Chinese Foreign Minister Wang Yi visits Sri Lanka during 13–14 January, amid ongoing bilateral cooperation and heightened global tensions. During the visit, progress on the proposed Sri Lanka–China Free Trade Agreement is also likely to be discussed, with potential emphasis on energy-related sectors, including refining, storage, and transshipment at Hambantota Port. The Sinopec refinery project has faced delays over issues such as equity structure, tax concessions, market access, and land allocation, prompting renewed diplomatic engagement ahead of Wang’s visit.

At the same time, Chinese national oil companies hold significant interests in Venezuela’s oil sector. According to energy analysts, Sinopec Group is a partner in a joint venture controlling about 2.8 billion barrels of Venezuelan oil reserves, while China National Petroleum Corporation (CNPC) controls about 1.6 billion barrels — reflecting long-standing Chinese investment in Latin America’s largest hydrocarbon producer.

Even under the new JVP–NPP Government, with its leftist-leaning policies, Sri Lanka’s strategic choices remain under close international scrutiny—much like the ‘eagle eyes’ trained on developments in South America.

The Venezuela operation

In the context of Trump’s global strategy, Venezuela – a socialist/leftist State since 1999 under Chávez, with Maduro continuing the model, has become a focal point. Long viewed by the administration as spiralling out of control under Maduro, the country’s political and economic instability provided an opening for a bold US intervention.

The US swiftly imposed a naval blockade, seized Venezuelan oil tankers, and took control of crude exports, promising to market oil through American channels a few days ago. Caracas was instructed to sever ties with China, Russia, Iran, and other US rivals to resume cooperation, beckoning an unprecedented level of direct US control over a sovereign State’s strategic resources.

Venezuelans reacted with deep division. In Caracas, opposition supporters celebrated in the streets, while Maduro loyalists protested and mourned, leading to sporadic unrest. Globally, the US operation drew sharp responses: Moscow condemned the action as an “act of war,” and Beijing called it a “dangerous precedent” that jeopardises sovereignty and undermines the UN Charter. In a related escalation, the United States confiscated a Russian‑flagged oil tanker suspected of transporting Venezuelan crude in violation of sanctions, highlighting the increasingly chaotic intersection of energy geopolitics and great power rivalry.

Analysts and commentators have speculated that such bold unilateral actions could influence how other major powers think about the use of force. In Chinese media and on social platforms, some users have even discussed the Venezuela operation in comparison to cross‑Taiwan Strait tensions. But experts caution that the situations are fundamentally different. China’s leadership officially maintains that Taiwan is part of China’s territory and should be reunified under the ‘one‑China’ principle. While the Venezuela precedent may be exploited rhetorically, it does not make a Chinese military attack on Taiwan more likely in the near term.

The US intervention in Venezuela is widely interpreted as a modern assertion of the Monroe Doctrine, which is a willingness to defend what it perceives as its sphere of influence in the Western Hemisphere. At the same time, it mirrors strategic competition in the Indo-Pacific, where the US seeks to limit China’s growing influence.

Sri Lanka’s foreign policy reflects this delicate balance. The country maintains strong ties with India while pursuing Chinese financing for critical development projects. By engaging with the Quad alongside leveraging Chinese infrastructure investment, Sri Lanka aims to preserve strategic autonomy and navigate the pressures of great power competition. However, close engagement with the Chinese Communist Party has raised concerns within diplomatic circles.

Energy, South Asia, and the ripple effects of Venezuelan instability

The Venezuela crisis has significant implications for energy markets, particularly in South Asia. India, a major crude importer, has historically sourced a portion of its heavy crude from Venezuela. However, according to India’s official trade and oil import data, Venezuela’s share in India’s crude oil imports in FY2024 was approximately 0.6 per cent, with imports valued at about USD 802 million. This marked a modest recovery from earlier years when sanctions had forced Venezuelan oil out of India’s import basket.

For context, this followed a period (FY2022–FY2023) when imports were effectively zero due to US sanctions, and prior to that, Venezuela had been a more significant supplier—accounting for up to around 6.7 % of India’s crude in FY2018 before sanctions tightened. The US sanctions—aimed at limiting revenue to the Maduro Government—forced Indian refiners such as Reliance Industries and Indian Oil to cut imports sharply. While India now sources most of its crude from the Middle East, Russia, and the Gulf, volatility in Venezuelan oil markets continues to indirectly affect fuel costs and inflation, underlining the interconnected nature of global energy security.

The Trump administration’s goal extends beyond stabilising Venezuela, and it aims to control global oil flows, limit China and Russia’s access to Venezuelan resources, and signal US strategic resolve. By directing Venezuelan oil through US channels and inviting American firms to invest in the country’s energy sector, the administration seeks to use oil as both a geopolitical and economic tool.

China and Russia: Strategic countermeasures

China and Russia have long-established interests in Venezuela. Chinese State oil companies, CNPC and Sinopec, hold stakes linked to 1.6 and 2.8 billion barrels of reserve entitlement, respectively. Through long-term oil-for-debt agreements and direct investment, Beijing secured sustained access to Venezuelan crude, which supported both its refineries and diplomatic ties in Latin America.

Russia, while less commercially involved in production, has cultivated a strategic relationship with Caracas, facilitating the transport and marketing of Venezuelan crude through ‘shadow fleet’ tankers. This logistics network allowed Russia to maintain influence despite Western sanctions.  The latest US interventions—seizing tankers and controlling exports—have disrupted these arrangements, straining Beijing’s and Moscow’s access to Venezuelan oil and intensifying tensions over energy security and geopolitical influence.

Direct US oversight of Venezuela

President Trump has publicly stated that the US intends to “run” Venezuela until a “safe, proper, and judicious transition” occurs. While the timeline remains unclear, the administration has outlined a comprehensive plan to control oil production and exports, directing revenue flows through US channels and also for the liquidation of stored crude, estimated at 30–50 million barrels, which would benefit both US interests and Venezuelans.

Also, looking at investment in energy infrastructure, inviting US firms to rebuild the nation’s dilapidated oil sector. The stage is also set for a political engagement with opposition leaders, such as Nobel laureate María Corina Machado, to build legitimacy for the interim administration, international reports say.

Sanctions and US policy

The Trump administration’s Venezuela policy builds on a decade of US sanctions and diplomatic pressure. Country-specific measures began in 2015 under President Barack Obama with Executive Order 13692, which declared Venezuela a national emergency due to democratic erosion, human rights abuses, and corruption. Subsequent orders under Trump, such as Executive Orders 13808 and 13850, targeted the Venezuelan Government, PDVSA, and associated financial networks.

Sanctions aimed to restrict revenue flows, freeze assets, and limit international financial access for Maduro’s regime. These measures also signalled the US commitment to its allies and partners,   supporting democracy and the rule of law, which would be enforced through economic and, eventually, military means.

Trump’s strategic vision extends beyond Venezuela. Iran, identified alongside Venezuela as central to US foreign policy, in his 2017 UN address, he explicitly told what he had in mind about Iran and Venezuela.

Navigating the new global cold war

The capture of Nicolás Maduro and US control over Venezuelan oil mark a turning point in 21st-century geopolitics. The operation is a part of a broader US strategy of asserting influence in both the Western Hemisphere and the Indo-Pacific, while constraining the ambitions of China, Russia, and other strategic rivals.

As the US continues to advance its ‘America First’ agenda, countries across the Global South will now have to recalibrate their foreign policy strategies, balancing economic priorities with political realities. The emerging ‘New Cold War’ is no longer confined to Europe or the Indo-Pacific—it has extended into Latin America, shaping the future of global energy, trade, and strategic alliances for decades to come. The US has pursued a hardline approach both to curb the outflow of American capital and to reassert control over the global influence it once exercised several decades ago.

The latest salvo by President Trump is the directive titled “Withdrawing the United States from International Organisations, Conventions, and Treaties that Are Contrary to the Interests of the United States.” It instructs all executive departments and agencies to take immediate steps to implement the US withdrawal from the organisations listed in Section 2 of the Memorandum. For United Nations entities, this withdrawal involves ceasing participation in or funding to these bodies to the extent permitted by law. While the move affects 31 institutions and represents a significant blow to the global system, the administration frames it as a measure to encourage these organisations not to be dependent on US funding.

The views expressed above belong to the author(s).