The removal of Nicolás Maduro in Venezuela may represent more than a regime change it could mark the opening move in a broader U.S. effort to realign Latin America geoeconomically. At stake is Washington’s ability to curtail Russia’s and China’s use of the Western Hemisphere as leverage in global commodity and financial markets. Central America, given its strategic geography, could be the next focal point of this contest.
The region occupies a critical position in global trade flows, linking major shipping lanes through the Panama Canal, Caribbean transit routes, and Pacific ports in Mexico and Central America. These corridors handle a substantial share of U.S. container traffic and global trade, making them indispensable to both licit commerce and sanction-evasion networks.
Russia’s Shadow Networks in the Hemisphere
Moscow has increasingly exploited Latin America’s geography through a growing “shadow fleet” of aging vessels operating outside Western insurance and compliance regimes. These ships transport Russian crude and refined products through Caribbean routes, the Panama Canal, and into the Gulf of Mexico, blunting Western sanctions designed to constrain Russia’s war financing.
Beyond energy, the region functions as a key node in Russia’s global financial architecture. Offshore hubs in the Caribbean host extensive shell-company networks used by major Russian firms, with estimates suggesting close to $70 billion in Russian assets controlled through these jurisdictions. This financial entrenchment has made Latin America an underappreciated pressure point in Moscow’s global strategy.
China’s Structural Economic Dominance
While Russia leverages geography and opacity, China dominates Latin America structurally. Beijing’s Belt and Road investments, development lending, and technology transfers far exceed those of Moscow and increasingly rival U.S. engagement. By the end of 2023, Chinese development loans in the region had surpassed $120 billion, cementing long-term dependencies through infrastructure, energy, and industrial projects.
China has complemented capital flows with tariff reductions, sectoral agreements, and supply-chain integration, positioning itself as a primary provider of technology, transportation equipment, industrial inputs, and consumer goods. These arrangements have narrowed the space for Western firms in sectors likely to shape the hemisphere’s long-term economic trajectory.
The U.S. Response: Reasserting the Sphere
Despite U.S. foreign direct investment stocks in Latin America around $1.4 trillion still dwarfing combined Russian and Chinese capital, strategic bilateral agreements signed by regional governments with Beijing and Moscow have constrained U.S. and European access to key markets.
The Trump administration’s so-called “Donroe Doctrine” seeks to reverse this erosion of influence. Venezuela appears to be the first test case in a strategy aimed at reasserting U.S. primacy by reshaping energy flows, financial oversight, and infrastructure investment across the hemisphere.
Shifting Regional Oil Dynamics
Venezuela has long underwritten allied regimes from Cuba to Nicaragua by supplying subsidised oil, often with Russian backing. Together, Venezuela and Russia account for over 60% of Cuba’s oil consumption, turning energy supply into a powerful geopolitical lever. Any U.S. disruption of these flows risks severe economic destabilisation for Havana.
More broadly, tighter scrutiny of Caribbean shipping, reflagging practices, and maritime insurance would raise costs for traders and restrict sanctioned crude flows. This could increase reliance on U.S. Gulf Coast refineries while weakening Russia’s growing role as a petroleum supplier to countries such as Brazil.
At the same time, reintegrating Venezuelan oil under U.S. oversight would directly challenge regional exporters like Mexico, Colombia, and Ecuador, which have expanded their market share during Venezuela’s production collapse.
Beyond Oil: A Wider Geoeconomic Contest
The implications extend far beyond hydrocarbons. A successful U.S. reassertion could open space for American investment in nuclear energy, transport infrastructure, critical minerals, and fertiliser production—sectors currently dominated by Chinese and Russian firms in countries such as Bolivia, Argentina, Brazil, Chile, Peru, and Venezuela.
However, coercive measures carry risks. Heavy-handed U.S. action could disrupt regional trade, strain diplomatic ties, and paradoxically accelerate alignment with China rather than reversing it especially if alternatives to Chinese capital are slow to materialise.
Analysis
Venezuela’s removal is best understood not as an isolated intervention, but as a signal of intent. Washington appears to be testing whether selective coercion—combined with control over energy and shipping chokepoints can roll back two decades of Russian and Chinese geoeconomic expansion in Latin America.
Yet history suggests that dominance cannot be restored by pressure alone. Without credible, large-scale economic incentives, the U.S. risks turning Venezuela into a symbolic victory rather than a strategic turning point. If matched with sustained investment and market access, however, this opening move could indeed mark the start of a broader reset one that reshapes not just oil markets, but the future balance of power in the Western Hemisphere.
With information from Reuters.
