Venezuela’s Presidential Election: How Significant is the Outcome for the United States?

Though we have seen the margin narrow during the final days of Sunday’s special presidential election in Venezuela, most reports conclude that the likely victor will be Nicolás Maduro of the United Socialist Party of Venezuela (PSUV). For Venezuela, a Maduro victory means maintaining continuity of the policies enacted during Hugo Chávez’s 14 years as head of the Venezuelan state, both domestically and internationally.

A Maduro victory also implies little change in the U.S.-Venezuela relationship. While there had been some communication between Maduro and the State Department in late 2012, those conversations have yet to materialize into a serious reconciliation. And judging by the hyperbolic, anti-American rhetoric of Maduro’s campaign, these efforts appear unlikely to bear fruit anytime soon. As one senior Latin American diplomat intimated, “it is not in Maduro’s interest to have the United States as a friend, Maduro needs to be more Chavista than Chavez, and Chavismo does not work with America as its ally.”

In the past, this scenario would have likely brought much consternation from U.S. officials. But recent changes in the relationship highlight why the United States can allow itself to operate from a different posture when dealing with Venezuela after Sunday’s election.

Q1: How is the energy relationship between the United States and Venezuela evolving?

A1: Much has been said about the interdependence of the two countries, but recent figures show this is becoming less and less so. Venezuela, through the state-owned oil company PDVSA, is the fourth largest oil provider to the United States, trailing only Canada, Saudi Arabia, and Mexico. At the end of 2011, Venezuela represented 11 percent of imports for the United States—the world’s largest oil consumer. To be sure, 11 percent remains a significant share of the U.S. market, but Venezuela’s share continues to decline. As recently as 2007, U.S. imports of Venezuelan oil stood at 1.4 million barrels per day (bpd); by 2012, this number stood at 879,000 bpd, according to preliminary figures released by the U.S. Department of Energy’s Energy Information Administration.

Meanwhile, the United States continues to advance on its path of increasing energy independence as production of shale gas and tight oil grows. Final approval of the 2,000 mile Keystone pipeline, which would bring 700,000 bpd of oil from Canada to refineries in Houston and the Gulf of Mexico, would increasingly delink the United States from Venezuelan exports. Not to mention the possibility of increasing deep-water exploration in Mexico as it begins to enact reforms of its energy sector.

For Venezuela, the U.S. market will remain the number one destination of oil exports, with roughly 40 percent of its oil going to the United States, followed by the Caribbean and China. The oil sector accounts for 25 percent of Venezuelan GDP and 80 percent of exports. Less demand from the U.S. market would hit the Venezuelan economy with considerable force. The United States might see adverse effects from rapidly decreasing Venezuelan supplies, such as higher fuel prices, and growth would slow, but these effects would likely be transitory.

What is more likely in the midterm is a rebalancing of the U.S. energy basket. This is likely to include less dependence on Venezuelan oil because of the changing energy scenario described above. If current trends continue, the Venezuelan economy is likely to experience difficulty. Despite tight global supplies of oil, Venezuela may struggle to find new buyers and to reorient infrastructure used to refine its oil to reach other markets, including Asia, since today only the United States is well-equipped to refine Venezuela’s heavy, low-quality oil.

Q2: Where does anti-drug trafficking cooperation stand?

A2: In the 1980s, officials in Caracas and Washington, D.C. developed multiple joint antidrug trafficking initiatives as a result of a memorandum of understanding (MoU) signed in 1978. By the beginning of the twenty-first century, this bilateral relationship had blossomed, with both sides in close consultation on logistical and technical support, sharing information, and confiscating illegal narcotics shipments.

However, since 2005 the Venezuelan government has dramatically reversed course and has accused the U.S. Drug Enforcement Agency (DEA) of conducting espionage within Venezuelan borders. Amid this turmoil, Caracas demanded the renegotiation of the MoU but when it came time to sign an appendix prepared by a U.S.-Venezuela Commission, the Venezuelan president backed down.

The Chávez government’s links with FARC guerrillas and the porousness of the Venezuela-Colombian border has turned Venezuela into one of the main gateways for cocaine headed for the United States. The DEA, after the fallout with the Venezuelan government, proceeded to appoint its former exemplary partner as failing to meet international standards in anti-trafficking measures, and consequently imposed an arms embargo on the Chávez government. This measure prevents Venezuela from purchasing arms or defense services, not only directly from the United States but also from purchasing arms from a third country that originated in the United States.

As revealed by Eladio Aponte Aponte, former president of the Criminal Chamber of the Supreme Court and military prosecutor until ousted by Chávez, possible links by members of the Chávez government with drug dealers only serves to further the distance between the United States and Venezuela, especially since the United States has found willing and effective partners in Colombia and Mexico especially.

Q3: How does the Venezuela-Cuba relationship impact the United States?

A3: Some have suggested that Venezuela could serve as a valuable interlocutor in a U.S.-Cuba rapprochement. However, this is likely wishful thinking. The link between Maduro and the Castro brothers brings no added value to talks between the United States and Cuba and may further complicate the issue.

In this regard, if Washington were to initiate efforts to find areas of cooperation with the Venezuelan government it may consider dealing directly with the Cuban government, as Cuba, not Venezuela, seems to be the senior partner in the Cuba–Venezuela relationship.

Much has changed in the U.S.-Venezuela relationship. A new environment highlights why the United States can allow itself to operate from a different posture when dealing with Venezuela. A United States with increasing energy production, close cooperation with Mexico, Colombia, and other actors in the region on antidrug trafficking initiatives, and the subordinate nature of Caracas’s relationship with Havana signifies that for many needs, the United States can get things done without going through Caracas.

Carl Meacham is the director of the Americas Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Ana Rodríguez, an intern scholar with the Americas Program at CSIS, provided research assistance.

Critical Questions 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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