It is high time that Bharat takes lead in Global South Initiatives to combat the US hegemony and nip in the bud the nasty pursuit of neo colonialism. — Dr. Dhanpat Ram Agarwal
Long before Venezuela became a symbol of global geopolitical tension in the early twenty-first century, its vast natural riches had already attracted the world’s great industrial powers. In the early decades of the twentieth century, international oil giants such as Standard Oil and Royal Dutch Shell — and later American majors like ExxonMobil and Gulf Oil, which evolved into today’s Chevron — dominated Venezuelan oil fields, extracting enormous quantities of crude to fuel industrial growth in the United States and Europe. These companies oversaw drilling, refining and export operations across Lake Maracaibo and beyond, shaping the nation’s economy while channeling profits back to far-flung corporate headquarters. By the mid-1970s, a rising nationalist sentiment, fed by a sense of economic dispossession and resource exploitation, found voice in Caracas. Venezuela, sitting atop some of the largest proven oil reserves on the planet, decided to wrest control from foreign concessionaires. In a defining act of national assertion, the government nationalised the entire oil industry on January 1, 1976, creating Petróleos de Venezuela S.A. (PDVSA). This act did not merely shift ownership; it marked the beginning of Venezuela’s long journey from peripheral resource provider to centre of global geopolitical contention.
To understand why Venezuela today occupies such a strategic place in global affairs, one must first understand the silent architecture of power that emerged in the 1970s. After the collapse of the Bretton Woods system in 1971, the U.S. dollar lost its tie to gold — yet paradoxically grew stronger. Through a series of strategic arrangements with major oil-producing countries, most notably within OPEC, oil began to be priced almost exclusively in U.S. dollars. Thus was born the petrodollar system, in which energy, the lifeblood of industrial civilisation, became the anchor of American financial dominance. Countries that needed oil had to hold dollars; countries that sold oil recycled those dollars into American banks and Treasury bonds. The dollar became not just currency, but the invisible infrastructure of global power.
Within this global structure, Venezuela’s oil was once a reliable pillar of the U.S.-centred energy economy. But as the era of nationalisation matured, oil in Venezuela became more than a commodity; it became a political instrument. Under Hugo Chávez, who rose to power in 1999, Venezuela’s foreign policy took a bold new direction. Chávez openly challenged U.S. dominance in the Western Hemisphere, rejected the conditionalities of Western financial institutions, and promoted a vision of South-South cooperation and resource sovereignty. His successor, Nicolás Maduro, continued in the same vein, strengthening ties with China, Russia, Iran and Cuba.
China’s entry into Venezuela’s energy landscape was neither accidental nor purely economic. Beijing offered something that Western governments rarely did — large infrastructure loans without political conditions, long-term energy purchase agreements, and a willingness to engage on Beijing’s terms. Venezuelan oil began flowing eastward, often as repayment for Chinese credit. A new, informal energy corridor between Caracas and Beijing emerged, quietly reshaping trade patterns and strategic alignments.
At the same time, Venezuela began experimenting with mechanisms that challenged the centrality of the dollar. Some oil was traded outside traditional dollar channels, alternative financial and barter arrangements were attempted, and crude shipments were routed through opaque “shadow fleets.” While Venezuela alone could not dismantle the petrodollar system, these measures carried symbolic importance — especially for other countries seeking to lessen dependence on the U.S. currency. Russia, Iran and several BRICS nations were already exploring alternative settlement systems, and Venezuela’s moves intersected with this broader trend of de-dollarisation.
The U.S. response to these developments was not diplomatic engagement but financial warfare. Over the past decade, sanctions became the primary tool of American statecraft. Venezuela’s central bank, its national oil company, shipping networks and numerous officials were placed under sweeping sanctions. Similar blockades existed for Cuba and Iran, but Venezuela’s case was unique in that it aimed not simply to punish misbehaviour, but to structurally constrain an alternative economic order. By restricting access to the global financial system — especially dollar clearing and SWIFT messaging — the United States wielded its currency dominance as a strategic instrument. Yet, rather than isolating Venezuela in a benign system, these sanctions helped propel Caracas deeper into alternative networks and further from Western financial orbit.
The internal consequences of economic sanctioning were stark. Venezuela’s economy collapsed, leading to hyperinflation, widespread shortages, and a humanitarian crisis of historic proportions. Millions fled across borders, creating one of the most significant migration movements in the Western Hemisphere. Criminal networks expanded, and narcotics trafficking grew along fragmented supply corridors. And as Venezuela’s internal stability deteriorated, Washington began framing the situation not merely as an ideological or economic dispute but as a security crisis — encompassing migration, drug trafficking, and state failure.
By the early 2020s, the international system itself was shifting beneath these regional dynamics. The post–Cold War belief in a stable, rules-based global order — anchored by institutions like the United Nations and the World Trade Organization — was fading. The WTO’s dispute resolution mechanisms stalled. UN resolutions were often ignored. Under the leadership of President Donald Trump, the United States openly abandoned many multilateral commitments, embraced unilateral trade tariffs, and signalled a new era of transactional geopolitics. At the World Economic Forum in Davos in January 2026, several Western leaders acknowledged that the rules-based order of the late twentieth century had given way to a system governed more by power and negotiation than by universally accepted norms.
Within this turbulent global context, events in Venezuela reached a dramatic climax. On 3 January 2026, the United States carried out a large-scale military operation in Caracas and other locations as part of what officials called Operation Absolute Resolve, resulting in multiple explosions and strikes targeting military installations, and culminating in the capture of President Nicolás Maduro and his wife. Maduro was subsequently flown to New York to face federal charges related to drug trafficking, drawing intense global controversy and condemnation from many nations. The U.S. military also began an extensive campaign to seize oil tankers linked to Venezuelan crude, intercepting a series of sanctioned vessels as part of an effort to control the nation’s energy exports.
In the weeks that followed, the United States asserted that it had taken custody of significant quantities of Venezuelan oil, applying U.S. refining capacity and planning large-scale sales in global markets — a move framed as stabilising supply but also as a strategic assertion over energy flows. Caracas and its supporters decried the actions as imperial aggression, while Washington characterised them as necessary to counter narcotics trafficking and restore order.
This intervention in Venezuela is unmistakably framed by its backers as a reassertion of the Monroe Doctrine, the centuries-old principle that the Western Hemisphere is within the United States’ strategic sphere. Modern proponents of this doctrine argue that no external power — be it China, Russia, or others — should be allowed to exert hegemonic influence in Latin America. Yet the operation also exposes the contradictions of a world where military force and economic control increasingly replace diplomatic negotiation and institutional constraint.
Parallel to the military developments, President Trump used the Davos platform in January 2026 to launch an initiative called the Board of Peace, presenting it as a new global mechanism to manage conflict and reconstruction in war-torn areas. The Board, which Trump pitched as a “nimble” alternative to traditional multilateral institutions, was met with indifference or outright scepticism from many world leaders, and some invited partners, such as Canada, declined to join. Rather than strengthening international cooperation, the Board’s rapid formation, lack of statutory authority, and requirement of large financial commitments from permanent members highlighted how global governance is being reimagined as a voluntary, personality-driven forum rather than a framework with binding legal teeth.
Venezuela’s journey over these five decades reveals much about the emergence of a multipolar world. Where once the U.S. dollar and American military and financial structures defined the global system, today multiple centres of influence collect and contest power. The United States retains significant capacity, but China dominates industrial supply chains and holds deep pockets for infrastructure finance. Russia asserts strategic military weight, especially in energy geopolitics. The European Union wields regulatory influence and large markets. India’s demographic and civilisational weight adds a new dimension. Within this multipolar architecture, power is no longer guaranteed by any single actor; it is negotiated, contested and sometimes fought for.
In such a world, Venezuela occupies a paradoxical space: it is a relatively small country, yet its oil — and its political fate — touches the deepest fault lines of the global system. It is not important solely for the oil beneath its soil, but for what control over that oil implies: influence over currency, trade and strategic alignment. Its crisis is not a local event but a symbol of a transition, from a unipolar order anchored in American predominance to a multipolar system where energy, currency and power converge in new configurations.
Oil, in this new age, does not just fuel industries; it fuels geopolitical narratives. Currency no longer simply measures value; it denotes strategic positioning. And power no longer operates solely through international rules, but through the interplay of interests, leverage and realpolitik.
Venezuela’s story — from a resource frontier exploited by foreign oil giants to a battleground of economic colonialism in the twenty-first century — thus offers a lens on the broader transformation of the global order. It is not merely a chapter in Latin American history, but a chapter in the history of the world — a story of how the control of resources and currency can shape the destiny of nations and the structure of international power.
It is high time that Bharat takes lead in Global South Initiatives to combat the US hegemony and nip in the bud the nasty pursuit of neo colonialism.
