Oil sanctions. Deadly violence. Dire economy. How the Venezuelan crisis could affect US

Deirdre Shesgreen

WASHINGTON – The Trump administration’s push to oust Venezuela’s embattled President Nicholas Maduro has wide-ranging implications for the U.S. – from a possible disruption in the oil market to a broader geopolitical confrontation pitting the U.S. against Russia and China.

On Wednesday, President Donald Trump tweeted about the crisis:

"Maduro willing to negotiate with opposition in Venezuela following U.S. sanctions and the cutting off of oil revenues. Guaido is being targeted by Venezuelan Supreme Court. Massive protest expected today. Americans should not travel to Venezuela until further notice."

Here’s a quick rundown of what's happening in Venezuela and four potential ripple effects for Americans and for U.S. foreign policy:

Will Trump order a U.S. military intervention in Venezuela?

The president and his top advisers have clearly stated they are considering “all options” to force Maduro out and to support opposition leader Juan Guaido, leader of Venezuela’s National Assembly, who has declared himself interim president.

Trump’s national security adviser, John Bolton, fueled speculation of a U.S. military deployment on Monday when he appeared at a White House briefing clutching a notepad with the words “5,000 troops to Colombia” scribbled on it. Colombia is Venezuela’s neighbor, and the country’s president, Ivan Duque, has joined the U.S. in pushing for Maduro’s ouster.

Such a move would significantly escalate U.S.-Venezuelan tensions and could fuel allegations of a U.S.-backed coup in a region long inured to American meddling. 

It was not clear if Bolton, a defense hawk, meant for his notes to be visible to the assembled reporters – or if it was an inadvertent disclosure. But the White House did nothing to quiet speculation about U.S. military involvement.

“As the president has said, all options are on the table,” a White House spokesman responded when asked if Bolton’s note meant the U.S. was planning to send troops to Colombia. On Tuesday, Trump's acting Secretary of Defense Patrick Shanahan told reporters he had not discussed the issue with Bolton and declined to comment on the possibility of troop deployments to Colombia.

Russia, China and Turkey have firmly backed Maduro's regime, while Canada, the U.K., and many other countries have joined the U.S. in recognizing Guaido as Venezuela's legitimate leader.

WASHINGTON, DC - JANUARY 28: With handwritten notes on a legal pad, National Security Advisor John Bolton listens to questions from reporters during a press briefing at the White House January 28, 2019 in Washington, DC. During the briefing, economic sanctions against Venezuela's state owned oil company were announced in an effort to force Venezuelan President Maduro to step down.

U.S. sanctions on Venezuela’s oil industry could hurt American-based refineries  

The Trump administration slapped sanctions on Venezuela’s state-owned oil company Monday, effectively barring the country from exporting its crude oil to the U.S. in an effort to starve Maduro’s regime from that vital stream of revenue.

Venezuela has the largest amount of proven oil reserves in the world, and it ranks as one of the top sources of crude for the U.S. Gulf Coast refineries will be most directly affected, as they’re forced to find other sources of crude oil.

In announcing Monday’s action, Trump’s Treasury Secretary Steven Mnuchin said some refineries had already begun to transition away from Venezuelan crude and the new sanctions would allow for an “orderly transition” with minimal impact.

“Gas prices are almost as low as they've been in a very long period of time. These refineries impact a specific part of the country,” Mnuchin said. “We don’t expect any big impact in the short term.”

Oil prices ticked up on Tuesday, but some energy experts agreed with Mnuchin’s assertion that the sanctions would not hit U.S. consumers. They noted that Venezuela’s oil production has been declining for years amid Maduro’s corrupt and chaotic rule.

“For the average consumer this will have no effect,” said Gianna Bern, a former Latin American energy analyst with Fitch Ratings and now an associate professor of finance at the University of Notre Dame. “Where this comes into play is at the refining level.”

Antoine Halff, a senior research scholar at Columbia University’s Center on Global Energy Policy, said it’s too early to say for certain what the impact of the sanctions will be, but American consumers may see at least a small price increase at their local pumps.

“The crude from Venezuela is of a unique quality that is very well suited to U.S. refineries on the Gulf Coast,” Halff said. That type of crude is difficult to find right now, he said, because of declining oil production in Mexico and other problems. “There might be a little bit of a price premium” as Citgo, Chevron and others try to adjust to a new supply stream, he said.

More U.S. foreign aid will go to the region to address humanitarian crisis

Venezuelans are suffering from a spiraling economic and humanitarian crisis. A nationwide shortage of food and medicine has forced many Venezuelans to go hungry and caused an uptick in disease.

The country has also been wracked by hyperinflation, with consumer prices rising 1.3 million percent in 2018, according to the opposition-led National Assembly. Prices were doubling every 19 days on average by the end of last year, according to the BBC.

The dire conditions have prompted at least 3 million Venezuelans to flee their homeland, creating a refugee crisis in the region. Although most Venezuelans have fled to Colombia and other nearby countries, thousands of Venezuelans have applied for asylum in the U.S. in recent years, according to data from the Pew Research Center.

Secretary of State Mike Pompeo has promised at least $20 million in U.S. humanitarian aid to Venezuela but wants to channel the money to the opposition, not Maduro.  “The United States has been working with all countries who are interested in helping relieve that pain to a get a good outcome for the Venezuelan people,” Pompeo said Monday in an interview with a Colombian TV channel.

Don’t book any flights to Caracas

The State Department warned Americans not to travel to Venezuela in a new advisory on Tuesday.

Citing "crime, civil unrest, poor health infrastructure, and arbitrary arrest and detention of U.S. citizens," the State Department's guidance cautioned that the U.S. government has limited ability to help American citizens in Venezuela.

Anti-Maduro protesters have taken to the streets amid a spate of deadly violence and a brutal government crackdown on the opposition. The United Nations says at least 20 people have been killed, allegedly shot by the Maduro-controlled security officers or other pro-government forces. The UN's human rights chief Michelle Bachelet warned on Friday that the situation in Venezuela could “rapidly spiral out of control with catastrophic consequences."

The State Department had already ordered all of its non-emergency personnel to leave Venezuela. But top U.S. embassy officials remain in the country despite threats from Maduro's regime to force them out. 

John Bolton: Notes on '5,000 troops to Colombia' spark speculation about military intervention in Venezuela

Travel: State Department warns Americans not to travel to Venezuela

Oil: Trump administration slaps sanctions on Venezuela's state-owned oil company

This article originally appeared on USA TODAY: Oil sanctions. Deadly violence. Dire economy. How the Venezuelan crisis could affect US