Sanctions against Venezuela, a political and economic risk for Russia – 29/01/2019

When the US announced Monday that sanctioned the government of Nicolás Maduro where it hurts the most: in your oil revenue, Russia shouted. He said these measures were "illegal," accused Washington of "interference" and announced that he would defend Moscow's interests in Venezuela.

"The legitimate authorities of Venezuela believe that these sanctions are illegal and we add this point of view," said Kremlin spokesman Dmitry Peskov.

Look also

Clarin Bulletins

What happened today? We tell you the most important news of the day and what will happen tomorrow when you get up

Monday to Friday afternoon.

He accused Washington of "unfair competition" and "blatant interference". And he threatened: "We will defend our interests in the framework of international law, using all the mechanisms at our disposal. "

It happens that Russia has invested billions of dollars in hydrocarbons and arms in Venezuela.

The crisis of Nicolás Maduro's government in Venezuela therefore presupposes a political risk for Russia, which could lose its main ally in Latin America, but also economic for its significant investments in the oil sector.

Russia, like China and Turkey, has given support to Maduro, facing the decision of the United States and other countries of the world to recognize the head of Parliament, Juan Guaidó, as acting president .

Look also

If Maduro were to leave power, Russia could lose an alliance that began with the government of Hugo Chávez (1999-2013) and transformed into its main ally in the region. Since then, the country has also become the second creditor of Caracas, behind China.

Russia "risk that all relations cultivated for a long time lose their valuesays Nikolai Petrov, a professor at the Moscow School of Economics.

But there is a short-term risk that also worries Moscow. Venezuela owes Russia $ 3 billion that amounts to two annual payments of about $ 100 million and the next one will expire in March.

With the entry into force of US sanctions, Moscow believes that Venezuela will not be able to pay.

Look also

"There will probably be problems," Finance Minister Sergei Storchak said. "Now everything depends on the army, the soldiers, the veracity of their service and their oath," he added.

Moscow also has major commercial interests in the South American nation, including a partnership between the Russian oil company Rosneft and Petróleos de Venezuela SA, the Venezuelan state company sanctioned Monday by the United States.

If Maduro falls, "the risk of losing your investments will increase dramatically," says Daniel Rozental, a Venezuelan specialist at the Russian Academy of Sciences.

In December, during a visit from Maduro to Moscow, Russia has promised to invest 6 billion dollars in the oil and mining sector of the country.

Weapons, tanks, warplanes

"At first, the agreements with Russia were mainly military, with important orders for tanks, Kalashnikov rifles and Sukhoi planes. Russia has made loans to finance these military purchases. And then relations were created in the oil sector ", explains Serge Ollivier, specialized historian of Venezuela, professor and researcher at the University Panthéon-Sorbonne.

Since 2005, Venezuela has bought a total of 11,000 million dollars of Russian arms, according to the calculations of several media in the country, which makes Moscow the leading supplier of arms in the country of South America.

Some media claim that several Russian private companies are in Venezuela to support President Maduro, something that the Kremlin denies.

Russian Foreign Minister Sergei Lavrov warned that Moscow would "do everything possible" to support Maduro, while the Kremlin has declared that it wants to "defend its interests within the framework of international law".

"Russia will fight for its contracts and for its debts," said Vladimir Rouvinski, specialist of relations between Russia and Latin America at the Colombian University of Cali.

But "the Kremlin admitted that he could also speak with other Venezuelan forces provided that the transfer of power is legitimate"

In the oil sector, Russia has invested billions of dollars, mainly through the semi-public oil company Rosneft, led by the influential Igor Sechin. very close to Vladimir Putin, who frequently visits Caracas.

Rosneft participates in several oil and gas exploration and production projects in Venezuela, alongside PDVSA.

Part of Venezuela's debt with Russia is reimbursed with hydrocarbons under agreements between PDVSA and Rosneft. Russia has also agreed to restructure this debt on several occasions.

"By closing Caracas' access to Wall Street in 2017, Trump has brought the government closer to Moscow and Beijing to seek funding." Maduro had no choice but to ask more from Russia, which he took advantage of to obtain Interesting but very risky offers"says Serge Ollivier.

"The Russians took advantage of the vulnerability of Caracas", according to this historian, "but they are not paid as expected"because of"catastrophic state of infrastructure oil companies and the decline of PDVSA ".

"In future international negotiations, the only possibility for Russia to accept a political transition in Venezuela would be to get guarantees on your badets "adds Ollivier.

On Russian public television, the Caracas crisis was compared to the revolution in Ukraine of 2014, which brought down the pro-Russian president, provoking Moscow's anger.

However, according to Daniel Rozental, "pragmatism prevails in Russia", even if opposition to power should come. "Fight with Russia is not rational" for Venezuela, he says.

Source: AFP and AP