Colombia draws US support against Maduro: Update

  • Market: Crude oil, Oil products
  • 11/09/19

Updates throughout.

Bogota's case for casting Venezuelan president Nicolas Maduro and his government as sponsors of terrorist groups drew strong support today from the US and other allies in the western hemisphere, as well as from the Venezuelan opposition.

The US, Colombia, Brazil, Argentina, Canada and seven other members of the Organization of American States (OAS) voted today to invoke the 1947 Inter-American Treaty of Reciprocal Assistance. Venezuelan National Assembly speaker Juan Guaido, whom the OAS, the US and its allies in the western hemisphere recognize as the country's interim leader, voted in favor of the resolution. Mexico, which continues to recognize Maduro's government, opposed the invocation of the Rio Pact.

Colombia hopes to use the consultation process under the treaty, known as the Rio Pact or TIAR in Spanish, to build regional support for possible military action to thwart any substantial cross-border attacks from Venezuela. Colombia's foreign minister Carlos Holmes Trujillo spoke today at a special session of the OAS to present what Bogota says is evidence that the Maduro government encouraged Colombia's former guerrilla movement Farc to issue a call to arms against the Colombian government. Colombia says the Maduro government also provides active support to another Colombian rebel group, the National Liberation Army (ELN).

The US says it shares Colombia's concerns and sees the resolution as another means of undermining Maduro's grip on power. Deployment of the Venezuelan military along the Colombian border and "the presence of illegal armed groups and terrorist organizations in Venezuelan territory" demonstrate that Maduro is a threat to peace and security of Venezuela's neighbors, US secretary of state Mike Pompeo said today.

The Maduro government said today it will present "irrefutable information" to prove "the terrorist acts that are originated in Colombia against Venezuela."

The US will support Colombia if it takes military action to push back against attacks across the border with Venezuela, the State Department's Venezuela envoy Elliott Abrams said yesterday. "This is very dangerous, because if there are cross-border attacks from Venezuela into Colombia, we can expect the Colombians to react. And obviously, we would be fully supportive of Colombia in that situation," Abrams said.

Recognizing Guaido's interim authority has created a legal quandary for Washington as it considers Colombia's request to designate Venezuela as a state sponsor of terrorism.

"There is a small technical question here," Abrams said. The US no longer recognizes Maduro as Venezuela's legitimate leader, so "it raises a legal question about how you handle questions about sponsorship of terrorism." Bogota hoped a formal designation by Washington would lay a firm political foundation for potential military strikes by Colombia as Caracas deploys troops to the shared border.

In addition to the domestic repercussions of a potential military escalation, Bogota will have to contend with the uncertainty over the degree of US support as Washington evaluates the further course of its policy.

US president Donald Trump said today the US will continue to help the Venezuelan people "in a humanitarian way" and added that "it is probably not good in terms of crushing a terrible regime." Trump criticized his former national security adviser John Bolton, whom he fired yesterday, for being "way out of line" on Venezuela. "I disagreed with John Bolton on his attitude toward Venezuela," Trump said, without elaborating.

Bolton advocated intensifying the sanctions regime by targeting the remaining foreign buyers of Venezuelan crude. But Abrams said yesterday no such action is underway.

"Sanctions do work best when they are multilateral and when they are in a context of multilateral political support," Abrams said during a visit to Brussels to coordinate US and EU policy on Venezuela. "In this context the kind of sanctions the US is doing will have a real impact, are having a real impact."

Abrams blamed Russian state-controlled Rosneft, which is taking Venezuelan crude in repayment of prior loans made to Caracas, for "really squeezing" Venezuela. "They are buying these increased amounts of crude oil from Venezuela at a big discount and then they are selling them — refined products like gasoline, kerosene — at a big markup." But the US is not yet ready to impose sanctions to stop that trade, Abrams said. "At some point, we will have to consider the question of Rosneft's conduct and what kind of reaction we want to have to it."

Rosneft hit back against Abrams' comments, saying that US action to stop the return payment of its oil-backed loans would amount to illegal expropriation. But the company said it is ready to have an "open dialogue with the US to clarify its position."

US sanctions on Caracas have cut off state-owned PdV from what until January had been its primary sales market and redirected Venezuelan crude flows to India and China. Venezuela's oil production has stabilized at about 750,000 b/d in recent months, from a pre-sanctions level of about 1.15mn b/d, according to Argus estimates.


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