Dancing with the Dictator in Caracas

Russia’s unprovoked invasion of Ukraine has sent the Biden administration scrambling to respond firmly and to uphold the liberal international order under more duress than at any moment since World War II. Since the invasion on February 24, several strategic proposals have featured a détente with U.S. adversaries, especially those sitting on oil and gas reserves that could contribute to global market stability.

It is not hyperbole to say that Russia’s invasion of Ukraine has already proven to be a world-changing event. Europe awoke from 30 years of soporific defense policy and has reinvigorated its participation in NATO, including the reversal of a long-standing prohibition on the provision of lethal weapons. Switzerland broke its historical position of neutrality and joined the sanctions campaign against Russia. Japan has called for an end to the policy of “strategic ambiguity” regarding the defense of Taiwan and a joint nuclear deterrent. The opening of any one of these foreign policy doors during normal times would likely define a presidential term. That all of them opened in a matter of several weeks is nothing short of mind-boggling.

However, trading one dictator for another—especially the Nicolás Maduro regime in Venezuela—is a policy door that should probably remain closed. Biden should resist the urge to rush headlong into realpolitik, swapping the dictator residing in Moscow for others menacing the world. And in terms of the Maduro regime, rapprochement with Maduro in order to isolate Putin makes little strategic sense.

Pariah No More?

On March 5, 2022, a secret delegation of at least three U.S. officials, including a top White House official, met with Maduro and several members of his regime in Caracas. This was the first high-level meeting with the regime, which the United States considers illegitimate after a highly rigged election in 2018, in more than five years. In fact, it was one of the highest-level meetings the United States has held with Venezuelan officials since the election of Hugo Chávez in 1998.

Beyond concern for unjustly detained Americans—the Biden administration managed to secure the release of two prisoners while around half a dozen remain trapped in Caracas—the conversation encompassed a possible removal or relaxation of U.S. entity sanctions on Venezuela’s state-owned oil company Petróleos de Venezuela, S.A. (PDVSA), imposed since January 2019. The Biden administration hopes that the state-owned oil company could increase short-term output, offsetting imports of recently embargoed Russian oil and gas. Never one to miss an opportunity, Maduro had primed this very idea even before the secret delegation’s trip by declaring his regime stood ready to “give oil and gas stability” to the world. Cutting out Venezuela’s political opposition, Maduro appealed directly to the one who calls the shots on sanctions relief: the United States.

Further, the Biden administration appears to believe that by unwinding Trump-era sanctions on Venezuela, it can cleave Maduro from Russia, one of the regime’s most important allies with which it maintains a deep strategic partnership. This logic borders on amnesia, however, since it would be nearly impossible to extirpate more than 260 bilateral agreements signed over two decades of burgeoning Russian influence over Venezuela’s economy and its defense sector. Not only has the country’s Chavista movement positioned itself as an adversary of the United States for more than two decades, but Venezuela has purchased more than $10 billion in Russian arms and hosts Russian troops on its territory (purportedly, to perform maintenance functions for the military equipment).

It remains unclear what a strategic decoupling of Venezuela and Russia would even entail. Few grand strategists envisage the ability to pull Venezuela from the clutches of Putin’s patronage, which the Maduro regime has repaid with steadfast support for Russia’s invasion of Ukraine. In the past, Russia has leveraged Venezuela for power projection in the Western Hemisphere, including port calls for navy destroyers and submarines and the landing of Tu-160 nuclear capable, supersonic long-range bombers flown from Russian territory. When the United States withdrew from the Intermediate-Range Nuclear Forces (INF) Treaty, Russia openly mused about stationing cruise missiles in Venezuela as a response. The echoes of the Cuban Missile Crisis are chilling.

The Biden administration has not answered some of the most important questions in its otherwise laudable goal of isolating Putin’s Russia wherever it retains influence: Will Maduro deny port calls to the Russian navy? Will he deny airspace to Russia’s Tu-160 nuclear capable bombers? Will Russia cease its role propping up the Maduro regime, even accompanying Venezuela to past negotiations with the political opposition? Extensive U.S. sanctions on Russia’s military-industrial complex already threaten Venezuela’s military; forgoing Russian support risks losing all access to spare parts for the country’s military arsenal. It is important to be realistic and to remember that when it comes to alliances, weak authoritarian regimes tend to desire stronger authoritarian patrons, as evidenced by Venezuela’s diplomatic meetings with both Russia and China in the wake of the U.S. outreach.

The Numbers Don’t Add Up

Even if the Biden administration is intent on pursuing an “all of the above” strategy in the wake of its embargo on Russian oil, betting on the Maduro regime would not noticeably boost global supply. In other words, importing Venezuelan oil would provide Maduro with a lifeline while it is unlikely to do much to ease the extraordinary prices Americans currently pay at the pump.

The greatest inhibitor to increased Venezuelan production is the dilapidated state of the country’s oil sector itself. Quite simply, Venezuela no longer possesses its erstwhile capacity to turn on the taps. There is an urgent need in Venezuela for more drilling rigs and a massive capital infusion to lift the industry’s ceiling on production. To do so, it is likely that new laws would have to be passed or existing laws amended to give investors renewed confidence that some modicum of rule of law exists in Venezuela—an unlikely proposition so long as Maduro remains entrenched in power. Recent production has also suffered quality control issues when some cargoes bound for China were rejected.

The broader dynamics inhibiting Venezuela’s oil sector are not a function of U.S. sanctions. Rather, they are the result of unfathomable corruption, a lack of maintenance, and the precipitous decline of technical know-how within PDVSA itself. Indeed, the high water mark of Venezuela’s oil production occurred just before the election of Chávez in the late 1990s; Venezuela’s production has been in steady decline ever since.

On its best day, and with the help of clandestine Iranian condensate imports, Venezuela produces between 700,000 and 800,000 barrels of oil per day—a far cry from the 7 to 8 million barrels per day Russia exports to the world (the United States imports around 500,000 barrels per day from Russia.) Further, much of Venezuela’s current production is contractually obligated to countries such as Russia and China to repay past debts, and to Cuba to uphold its well-known security-for-oil arrangement. Yet, the United States has allegedly pursued an arrangement that would earn it exclusive supply if it relaxes oil sanctions. At the earliest, these macro dynamics mean Venezuela could augment production by several hundred thousand barrels per day only over the medium term. The war in Ukraine may well be over by then.

Moreover, Venezuela’s current debt load means that the most probable step in relaxing sanctions would likely mean an oil-for-debt trade. However, such an arrangement might prove highly unattractive to the Maduro regime. While it would inch Venezuela closer to fiscal solvency, there is likely to be stiff resistance within Maduro’s ruling faction to any agreement with the United States that does not bring new infusions of cash for the regime, on which it relies to lubricate the crony networks that cement its hold on power.

Beyond the numbers game, there is another way in which lifting sanctions on PDVSA complicates the goal of isolating Putin—Russia’s long-standing role in Venezuela’s oil sector. This role allows Russia to flout U.S. sanctions and is a source of enduring frustration; in 2020, Russia was responsible for lifting as much as 70 percent of Venezuela’s crude oil when few countries dared to touch it for fear of secondary sanctions. In response, the United States sanctioned TNK and Rosneft Trading, Swiss-based subsidiaries of Rosneft, one of Russia’s largest oil companies. Russia responded by engaging in an elaborate game of corporate musical chairs that transferred Rosneft’s ownings to a new company called Roszarubezhneft, reducing the parent company’s exposure to U.S. sanction designations. At the time of the maneuver, Russia’s ambassador to Venezuela assured Maduro that its latest iteration of Rosneft in Venezuela did not signal a weakening of its commitment to Maduro’s preservation. Roszarubezhneft still maintains a 40 percent stake in five joint ventures with PDVSA. Together, these joint ventures produce about 15 percent of Venezuela’s current oil output. Any relaxation of sanctions cannot ensure that Venezuelan oil exports do not fund Putin’s war machine.

Boosting Venezuela’s oil production under current conditions would also incur one final cost: it could erode the Biden administration’s credibility as an environmentally minded one. Simply put, PDVSA’s environmental record is appalling. The state giant has presided over 46,000 oil spills between 2010 and 2016, at which point it became state policy to cease reporting spills. Past research by CSIS confirms that the company still oversees an average of five spills per day, with recent imaging from NASA revealing oil slicks in the biodiverse Lake Maracaibo stretching for dozens of miles. To be sure, foreign policy is full of difficult trade-offs, but the Biden administration would have to reconcile itself to aiding the ongoing, state-sponsored environmental catastrophe unfolding in Venezuela.

Back on the Negotiations Carousel

Already, the political blowback has been fierce, among both Democrats and Republicans, regarding the possibility of rapprochement with Maduro. Congress would prefer to increase production at home or leverage friendly allies abroad, such as Colombia. Relaxing sanctions to increase Venezuela’s oil production risks lapsing into the type of transactional diplomacy many in the Biden administration pilloried during the Trump years. Worse, it has given the impression that recognizing the interim government of Juan Guaidó in January 2019 was partly a veiled attempt to control Venezuela’s oil, rather than the promotion of a political transition and a return to democracy through free, fair, and internationally observed elections.

However, the Biden administration’s outreach did succeed in getting the Maduro regime to commit to return to long-stalled negotiations in Mexico City, albeit without a specified timeline, agenda, or roster for the parties. The Maduro regime has sent tentative signals that it will return to negotiations started last year, although recent comments from leading regime officials indicate that there are clearly differences of opinion in the ruling party about the wisdom of doing so. Given the intensity of the political blowback at home, the Biden administration will need precisely this kind of political cover to even contemplate relaxing sanctions. To incentivize progress in negotiations, the administration says it will likely condition sanctions relief on tangible progress on the ground.

Although a return to the negotiating table meets one of the opposition’s principal demands of recent months, the Biden administration informed Guaidó that it would engage Maduro directly at the last minute. Thus, the meeting in Caracas undermined Guaidó’s already fragile standing, as well as exacerbate a growing schism between the opposition and the United States that the Maduro regime could deftly exploit. The release of two Americans unjustly detained by the regime may create pressures to reciprocate with concessions before negotiations begin. Further, having reestablished direct contact with the U.S. government, the regime is eager to maintain it and cast the opposition aside. To this end, Maduro’s negotiators have already insisted on the presence of the U.S. ambassador to Venezuela, James Story, at any future negotiations. (Russia will continue to accompany Venezuela in future negotiations, further complicating the idea that U.S. policy can drive a wedge between Putin and Maduro.)

Past attempts at negotiation with Maduro have demonstrated that there are few guarantees, and if handled poorly, negotiations and a relaxation of sanctions may lead to a kind of “dictator swap”—sacrificing the ambitions of the Venezuelan people to live in freedom and democracy for those of the Ukrainian people. In short, the globe’s ledger of human freedom would not be significantly advanced.

A Twenty-First-Century Kirkpatrick Doctrine?

The strategic imperatives of the Cold War forced all manner of uncomfortable compromises on U.S. foreign policy. In Latin America, the United States supported brutal dictators who towed the line on Soviet influence and the spread of communism. The Biden administration’s decision to engage the Maduro regime directly reveals its belief that the age of great power competition featuring two near-peer competitors will require similar types of difficult policy trade-offs. Putin’s imperialistic ambitions in Ukraine have driven what could be one of the most significant policy changes in Latin America in recent years. How else could one interpret the fact that several weeks ago, U.S. policy insisted on the centrality of interim president Juan Guaidó for negotiating sanctions relief and now members of the Biden administration sit down to negotiate directly with the very dictator indicted by the U.S. Department of Justice for his role in drug trafficking?

The idea that U.S. policies aimed at political transition and re-democratization should take a backseat to strategic imperatives was perhaps best expressed by Jeane J. Kirkpatrick, former U.S. ambassador to the United Nations during the Reagan administration. In her famous essay “Dictatorships and Double Standards,” Kirkpatrick argued that rapid liberalization in certain countries, especially in Latin America, had delivered them to anti-American political figures who ended up consolidating authoritarian regimes of their own. The push for political transition to liberal democracy in autocratic countries would have to be moderated when other strategic imperatives, such as regional stability and broader geopolitical concerns, took precedence.

There are many reasons why the Maduro regime is not a good candidate to lead a revitalized Kirkpatrick Doctrine. Maduro sows chaos in Latin America, has presided over potentially the largest economic decline outside of peacetime in world history, and has contributed to the out-migration of more than 6 million refugees. The regime’s abysmal human rights record—it is under investigation at the International Criminal Court for committing “crimes against humanity”—should preclude the Biden administration from lining its coffers by unwinding oil sanctions. Biden has declared a desire to stop financing Putin’s war machine—the same should continue to apply to Maduro’s apparatuses for committing grave human rights abuses.

Russia’s war in Ukraine has sent shockwaves around the world and accelerated the reconsideration of myriad U.S. strategies, but a Kirkpatrick Doctrine for the twenty-first century, with the Maduro regime in Venezuela as a leading contender for renewed U.S. engagement, makes little sense—if for no other reason than that the global corruption networks between authoritarians, stemming from their vast kleptocratic structures, prevent regimes like Maduro’s from playing any sort of reliable and constructive pro-U.S. role. Twenty-first-century dictators are less about ideology and more about maintaining the perverse privileges of power. More poignantly, Venezuelans may find the notion that their democratic aspirations must take a backseat to Putin and geopolitics a difficult notion to swallow.

Ryan C. Berg is senior fellow in the Americas Program and head of the Future of Venezuela Initiative at the Center for Strategic and International Studies in Washington, D.C.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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