What has Happened:

• Last evening, President Trump ordered a “total and complete blockade” of all sanctioned oil tankers entering and leaving Venezuela, in a major escalation of his pressure campaign against Maduro.
• However, it is not clear how many tankers would be affected, and to what extent the U.S. military would be involved in implementing such a blockade.
• A military blockade is considered an act of war, but Trump’s move appeared to stop short of a full blockade and it appeared to exclude Chevron, which has been operating in Venezuela and exporting oil under a license exempting it from sanctions.
• At least 34 U.S.-sanctioned oil tankers with a history of carrying Venezuelan oil are currently at sea in the Caribbean according to reports, and at least 12 of those tankers appear to be filled with crude oil from Venezuela.
• Venezuela has exported an average of 750,000 barrels a day this year with half of it going to China.

Why it Matters:

“President Trump’s announcement of a complete blockade on all sanctioned oil tankers entering Venezuela intensifies the pressure on Venezuelan President Maduro. This follows the administration’s designation of Maduro as the head of a foreign terrorist organization, an escalation from just labeling drug cartels as terrorist organizations. This strategic shift extends the U.S. focus from merely preventing drugs from reaching the U.S. to now targeting Maduro and his regime, aiming to force his capitulation and departure from Venezuela. The recent airstrikes on drug-running boats represent a military action, while the sanctions serve as an economic lever to cut off the financial resources sustaining Maduro’s regime. Although a naval blockade is considered an act of war under international law, this blockade targets only the sanctioned oil tankers illegally transporting oil from Venezuela. The global shadow fleet of oil tankers, which includes vessels moving oil from Russia, Iran, and Venezuela, primarily benefits China. Over one-third of the oil tankers in or approaching Venezuelan waters are sanctioned vessels. Last week saw 30 of the 80 tankers meeting this ratio. The U.S. Coast Guard alone cannot execute this mission, necessitating the presence of a substantial and growing U.S. military task force in the region. This task force supported the recent seizure of the sanctioned oil tanker Skipper, with assistance coming from the USS Gerald Ford CSG. During the first Trump administration, U.S. sanctions significantly reduced Venezuela’s oil exports. However, Venezuela has managed to circumvent these sanctions through the shadow fleet, recovering most of its exports. The increasing size of the U.S. military force in the region and President Trump’s escalating measures indicate a strategic shift from drug interdiction to the removal of Maduro.” – General Robert Walsh

 “I think we will see the beginning of a series of blockades in the Caribbean. Once the Venezuelan surrogacy of Cuba is ‘unplugged,’ Cuba becomes extremely isolated. What we can expect is a round of regional diplomacy over the repatriation of displaced Venezuelans and alignment (particularly with the right-leaning governments that are growing in number). I think you will see real operations to influence the outcome of the Colombian elections this spring and then the Brazilian elections in the fall. Once those pieces come together, the pressure campaign will move to a more and more isolated Cuba. The main lever Cuba will have left is a mass migration event. Therefore, we are likely to see a sustained naval presence (likely to include the ARG/MEU but minus the CSG) in the region throughout 2026. Of course, this begs the question of which region absorbs the risk of the capability gap as it is a zero-sum game. If nothing significant happens with Iran (big ‘if’), my guess will be the Eastern Mediterranean and potentially the Persian Gulf. I would think the CSG departs once there is regime change in Venezuela.” – General David Bellon

 “The administration is enforcing sanctions against illicit trafficking. Notably, Chevron has an exception and is still transporting crude unimpeded. The blockade will be crippling for Maduro financially and could be a tipping point for whether he remains in power. At least 90% of Venezuela’s export revenues come from crude oil sales. Loss of this revenue will significantly increase the pressure on Maduro who will likely be unable to pay the military, cartels, etc. for their loyalty. Illicit tanker traffic out of Venezuela already dropped precipitously since the seizure of the tanker last week. I think it’s unlikely we will see a response from any of the countries who benefit from the oil. China is the largest consumer, importing approximately 80%, but this only represents 4-7% of their total oil imports. China can weather the loss of Venezuelan oil.” – Admiral Kelly Aeschbach

 “From a macro perspective, it is interesting that someone is finally trying to enforce sanctions. Given the nature of Venezuela’s oil industry (heavy crude, marginal levels of production), I don’t think it has much of an impact on oil prices globally (crude is up 2% on this). What I’m more curious about, is if this is a warning to Iran that their shipments could be next? Even more importantly, though it seems less likely, is this a signal to Europe that if they really want a better deal for Ukraine they should enforce sanctions in their region? If either of those are the case, we could see a much bigger increase in the price of oil, gasoline, and diesel.” – Peter Tchir, Academy Securities Head of Macro Strategy

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