Venezuela Boils – Doing our Best to Update!

Daily reports from Venezuela are almost close to useless these days, because things are changing by the hour. By the time a reporter takes pen to paper (you hopefully understand the metaphor), and until it gets printed or published online or spoken on TV, it’s old news.

Here’s where we are right now, Tuesday, January 29th, 10PM, so remember that a lot of this may mean nothing after the date and time noted here. For purposes of clarity, let’s look at the current situation using timeframe subheads to best summarize each aspect of the crisis, and best illustrate how each aspect interacts with the other.

United Nations Security Council Met This Past Saturday

Just talk, which means nothing, plus no vote, which would mean nothing as well because of Permanent Members’ veto power. The U.S. and like-minded nations recognize National Assembly President Juan Guaidó as interim President of the country, and that Nicolas Maduro is illegitimate, because he “won” in May of 2018 on rigged elections.

Some SC members urge neutrality, while Russia and China urge support for Maduro. Note that Maduro’s administration owes Russia and China billions of dollars (double digit billions) in cash and oil shipments due to deals not approved by the National Assembly, as required by the country’s Constitution. Russia and China want their money, and Russia also wants a Cold War presence in Latin America, because that Cuba thing hasn’t worked out too well for them.

Russia and China also urge for no economic interference in the country. This is a biggie, because of all that money owed them!

The E.U. doesn’t support Maduro or Guaidó, but gives Maduro eight days to call for free elections or they’ll recognize Guaidó. Not a smart move, diplomatic or otherwise, because of Maduro’s unreliability in holding free and fair elections in the past. Fortunately, it doesn’t matter (maybe). See “Sunday” below.

Saturday Night, Reports of 400 Russian Military Personnel Arriving in Venezuela

Supposedly, to act as personal protective force for Maduro if U.S. acts militarily. Rumored to be a mercenary force.

Sunday, Maduro Rejects The E.U.’s 8-day Ultimatum

Boy, was Maduro mad at their insistence on new elections! He said no way, which means the E.U.’s  28 member nations say get out Maduro, Guaidó’s our man. Except the eight days expires Sunday, which also means between now and then, Maduro might try to take them up on their offer in an under-handed way to stay in power, which contradicts everything else which is set in motion anyway. Most of the rest of the world has left the Maduro Station.

As did the Venezuelan Military attaché in Washington, Colonel José Luis Silva, who announced that he’s recognizing Guaidó as President and demanded Maduro step down and all military start pointing their guns at Maduro and not the people. (I exaggerate for fun, but he basically told the military to throw Maduro out.)

Monday Morning, Trump Gets Serious, If Anyone Thought He Wasn’t Serious In The First Place

Ignoring everything said by Russia, China and some others at the Security Council meeting, Trump drops the big bomb, the oil bomb, but not an embargo. Something much better! National Security Advisor John Bolton and Treasury Secretary Steven Mnuchin announce at a press briefing:

The U.S. will continue to buy VZ oil, but all money will be paid into a separate block account only to be accessible to Guaidó and the new administration, and this even applies to shipments already on their way here. Maduro and his cronies won’t see a penny, and Maduro needs those pennies to pay his military cronies.

Sales to the U.S. represent almost half of their total oil production, which is paid in cash, and the other half of their production goes to just paying off loans to Russia and China. To simplify, without finding an alternate cash buyer like the U.S., Venezuela no longer has an oil income. They could seek an alternate cash buyer like India, but that’s easier said than done, not to mention that the U.S. gulf refineries are a lot closer to Venezuela than Bombay. Not to also mention that if India wants to do business with certain sectors of the U.S. energy market/sector, they’re going to have to play by these new U.S. rules in regards to Venezuela.

And if the above wasn’t enough, the U.S. also seized all Venezuela/state oil company PDVSA assets in the U.S., estimated at around $7 billion (not counting as of now unseized Citgo), to be handed over to Guaidó and the new government. (No, we’re not stealing it, although that’s enough to get our wall started!)

This oil non-embargo isn’t totally heartless, though. Venezuela is still free to buy the U.S. diluents they need to mix with their heavy crude in order to pipe it from their oil fields to tankers. Cash paid in advance, of course.

And oh:

Bolton also reiterated that all options are still on the table, which implies military action, of course. It was a powerful challenge to Russia and China to just try to do anything militarily in this neck of the woods. We dare you. (More on this below, the now famous “Yellow Notepad.”)

Monday Midday, Overt Attempts To Turn The Military

Intelligence, police, security and military personnel are randomly given Guaidó-authorized fliers with promises of amnesty for past human rights violations to support Guaidó and overthrow Maduro, vague as those amnesty promises may be. (Many are guilty of serious crimes and amnesty is a contentious subject.) Interestingly, no one is arrested for the distribution of such “subversive” material.

Monday LATER Midday, Huge Warning From Bolton Discovered: The Yellow Notepad

Someone releases a zoomed-in image of National Security Advisor John Bolton’s “Yellow Notepad” at the day’s earlier press conference, with the scribbled words “5,000 troops to Colombia” clearly visible. Many Venezuela followers like myself at first thought this was just a Photoshop hoax done by some guy I’d love to have a beer with, but damn it, no. Bolton actually threw another challenge out there, a visual one, to Russia and China, castrating any thoughts of military might they might have held in America’s backyard. It was magnificent.

Of course, 5,000 troops would be nothing in the event of a real conflict. If true in the first place, those 5,000 troops would probably be used to assist neighboring countries in the event of an even more escalating migrant crisis, in the event of a civil war, for example. If a real force went into the country, I think we can all agree to expect a significantly larger one.

Back to Monday Morning, The Mystery Plane

Flight N49801, belonging to Russia’s Nordwind Airlines, departs Moscow’s Vnukovo Airport. It’s a Boeing 777 with a capacity of 500, but there’s no one on it. Well, there’s someone on it, but not who you would expect. It carries two flight crews, suggesting a quick turnaround flight back to Moscow. Since Venezuela has its own planes for a quick nearby Maduro et al escape to Cuba (where else besides Cuba, Nicaragua or Bolivia in the region could they go?), two theories emerge.

Russia is simply bringing home those earlier placed mercenaries, or they’re picking up Maduro for his exit stage left to Moscow. Since most people doubt Maduro prefers a Russian winter over a Havana Beach, all bets are on the mercenaries. Plus, what is Russia going to do with Maduro since he’s no longer valuable to them? He’s no Snowden!

Tuesday Morning, Maduro (and Russia!) Start Worrying About Citgo

In light of Monday’s new and devastating U.S. policies, the Maduro administration is worried about what’s going to happen to their Citgo refineries and its associated operations here in the states. Russia is worried too, because they own 49% of that company due to Chavismo’s brilliant business and economic management sense, which basically gave away that huge portion of the company to Russia for pennies on the dollar.

So Maduro announced this morning that they’re studying legal actions to protect Citgo from American seizure. Good luck with that, Nicolas. 

Since Citgo is majority-owned by PDVSA… its footprint is in the states…it’s registered in the state of Delaware…and it’s already subject to seizure because of huge debts still owed to companies like ConocoPhillips, not to mention money owed to thousands of holders of defaulted VZ bonds…its goose is already cooked.

Citgo is the big “collateral” in Venezuela’s gigantic basket of unpaid debt, and even in the event of regime change, it’s probably gone. It would be a miracle for the country to be able to hold onto it, and since Russia holds 41%, no one is going to shed many tears if they suffer that loss. Too much money owed, and it’s unimaginable that the IMF (if it ever comes in) can concoct a plan to save it for Venezuela’s later benefit.

Tuesday Afternoon, A Few Moments of Quiet, For Now at Least

The mood on the ground in Venezuela is frighteningly optimistic. The people are afraid to be overly optimistic, but they want to be. They’ve just been down this road too many times before. On the whole, they’re thrilled with Trump’s actions, and the big joke there is that they would be happy to come up here and volunteer to build Trump’s wall for free! And they promise to go back if everything works out okay in Venezuela.

Still, there’s no significant movement yet on the military’s loyalty to Maduro, and that’s all that really matters now. That’s the whole 9 innings of the old ball game, and until they turn away from Maduro and escort Guaidó to the presidential palace Miraflores, we’re still in rain delay.

So far, Russia and China have been watching the game from the bleachers, but it’s the United States at bat with the bases loaded.

Tuesday Evening, Uh Oh

Venezuela Attorney General Tarek William Saab asks Supreme Court to investigate Guaido, and freezes his assets and prohibits him from leaving the county.

Bolton threatens serious retaliation.