Potential Financial Challenges for Russia in Venezuela: Oil and Arms Dealings at Risk, According to Expert

Russia might soon confront substantial financial losses in Venezuela due to the US military actions on January 3, which have jeopardized years of strategic investments and collaborations between Moscow and Caracas, suggests a think tank expert.

As Stephen Sestanovich, a senior fellow specializing in Russian and Eurasian studies at the Council on Foreign Relations, pointed out Wednesday, Russian investments in Venezuela’s oil sector over the past two decades may need to be discarded, either officially or unofficially.

Similarly, Sestanovich, who has served as an ambassador-at-large for the former Soviet Union at the State Department, observed that loans connected to Venezuela’s acquisition of Russian military equipment may face similar outcomes.

The appeal of such weaponry has notably declined post the US military intervention, he remarked.

The annual trade volumes between Russia and Venezuela, which amount to approximately $2 billion to $3 billion, might see a complete halt, he mentioned.

These specific economic challenges are contrasted by the potential political advantages for Moscow amid global changes, he suggested.

Sestanovich further noted that the Trump administration’s focus on retaining a US sphere of influence in the Western Hemisphere might be perceived as validating Russia's efforts to establish a similar influence in its region.

These developments come at a crucial time for Russia’s economic landscape, given that its involvement in Ukraine is nearing its fifth year next month.

Russia faces tightening revenues due to sweeping Western sanctions and low oil prices, which strain the funds Moscow relies on for its war efforts and broader economic support.

President Vladimir Putin has so far refrained from publicly commenting on the US operations in Venezuela. The Russian foreign ministry has urged for the release of ousted Venezuelan President Nicolás Maduro and advocated for a diplomatic discussion between the US and Venezuela.

Meanwhile, Roszarubezhneft, a Russian state-owned oil firm, has stated that its oil assets in Venezuela are entirely owned by the Russian government, as per an announcement earlier this week.