Navigating the New U.S.-Venezuela Dynamic

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We welcome you to the Greater Caribbean Monitor (GCaM).

In this issue, you will find:

•Navigating the New U.S.-Venezuela Dynamic

•Will Trump Intervene Militarily in Mexico?

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Within days of taking office, President Donald Trump signaled a tougher stance on Venezuela, reviewing Chevron’s oil license and ramping up deportation flights. In response, President Nicolás Maduro has projected a mix of defiance and cautious pragmatism.

• Despite vague hints to the contrary, it now appears the White House is seeking a modus vivendi with Maduro. Despite Maduro’s usual reluctance to accept deportees, 367 Venezuelan nationals, some of them members of the Tren de Aragua gang held at Guantánamo Bay, were repatriated last month.

• Honduras has emerged as a meeting point, with U.S. aircraft flying deportees to Palmerola air base, from where they are flown home by Conviasa, the Venezuelan flag carrier.

• Caracas is implicitly cooperating with the White House on immigration in exchange for some leeway on Chevron’s operations in Venezuela. Trinidad and Tobago, a prominent oil producer, is also seeking continued approval of its dealings with PDVSA, the Venezuelan state oil company.
  
  

Archives: The Chevron oil license, initially granted under President Joe Biden, has been a key economic lifeline for Venezuela despite U.S. sanctions. As of 2024, Venezuela’s oil production stood at 800,000 to 900,000 barrels per day, significantly down from 2.1 million barrels per day in 2015 due to mismanagement and sanctions.

• On February 18, 2025, Trump said the Chevron license was under review, stating, “We’re looking at that now.” This could indicate potential new restrictions on Venezuela’s oil exports, further pressuring Maduro’s government.

• Chevron’s operations account for roughly 25% of Venezuela’s oil production (200,000 to 225,000 barrels per day) and contributed nearly one-third of the government’s oil revenue in 2024. Revoking the license could shrink Venezuela’s GDP by an estimated 5% annually, exacerbating an already dire economic crisis.

• Hyperinflation, which reached 190% in 2024, could worsen if oil revenues decline further. The Trump administration will likely tread lightly in this regard; it wishes to avoid a further Venezuelan exodus.
  
  

Between the lines: Trump’s envoy for special missions, Richard Grenell, emphasized the administration’s priorities in a February 23 interview with The Epoch Times, saying: “Donald Trump is somebody who doesn’t want to make changes to the regime. He wants to do everything that we can to make the American people stronger and more prosperous.”

• Venezuela’s oil exports to the U.S. surged 64% in 2024, reaching 222,000 barrels per day. Chevron lobbyists have emphasized that Chinese, Indian, and Russian firms are likely to take their place if its license is revoked.

• At its most basic, Trump wishes for Venezuela to acquiesce to its citizens’ repatriation. Venezuelan oil makes up a relatively small portion of U.S. consumption; however slight its impact, it furthers the administration’s goal of lowering energy prices.
  
  

Pragmatism: During his first term, Trump took a confrontational stance on Venezuela, sanctioning PDVSA in 2019, recognizing Juan Guaidó as interim president, and supporting opposition efforts to remove Maduro. Maduro survived, bolstered by support from Russia, China, and Iran.

• Trump’s 2025 approach appears more strategic, mixing hardline measures—such as reviewing Chevron’s license—with selective engagement, like the migration deal reached by Grenell after “positive” talks.

• Indeed, on February 1, Trump claimed that Venezuela had agreed to take back “all illegal migrants, including gang members,” though independent verification is still lacking.

• Maduro, re-inaugurated in January 2025, is eager to stabilize relations but faces U.S. skepticism. The State Department refuses to recognize his 2024 election victory, citing allegations of fraud.
  
  

Crux: U.S. sanctions are estimated to have cost Venezuela $232 billion in oil revenue since 2017. The facts on the ground appear to be driving both parties towards an uneasy truce. Grenell has admitted as much, saying: “We are very clear about the Venezuelan government and Maduro, but we will not do anything to change it.”

• Negotiating with Trump could bring benefits, such as extended oil licenses or reduced sanctions, in exchange for concessions on migration. However, cooperation could prove politically risky. Maduro is as unlikely to embrace democratic reform as the Trump administration is to insist on them.

• For Maduro, however, reinforcing his strongman bona fides would come at a high price, likely marking a repeat of the 2011-2021 period, when Venezuelan oil production declined by an annual average of 8.2%.

• The U.S. is also concerned by projections suggesting that if the Chevron license is revoked, up to 800,000 additional Venezuelans could migrate by 2029, potentially straining U.S. borders further. 
  
  

The bottom line: The U.S. seeks leverage. Grenell’s statements indicate a focus on material interests, not regime change, opening the door to an uneasy coexistence. Maduro, for his part, seeks to reach an arrangement with the U.S. that allows him to remain comfortably in power and secure the funding necessary to keep his military fed and his regime afloat.

Six Mexican cartels have been branded as terrorists, fueling speculation about a potential U.S. military intervention in Mexico.

Context: In so doing, the State Department carried out one of President Donald Trump’s executive orders, where he designated eight criminal organizations as Foreign Terrorist Organizations and Specially Designated Global Terrorists (FTO and SDGT, respectively). 

• Among them are the Sinaloa Cartel, the Jalisco New Generation Cartel, the Northeast Cartel, La Nueva Familia Michoacana, the Gulf Cartel, and La Resistencia. 

• In addition to these six Mexican cartels, Venezuela’s Tren de Aragua and El Salvador’s MS-13 were included.

• Defense Secretary Pete Hegseth stated that “all options will be on the table” for a possible military intervention targeting these FTOs on Mexican soil.
  
  

Why it matters: It need not be added that designation doesn’t automatically trigger military action. It does, however, lay the legal groundwork for such a move. Following the 9/11 attacks, the U.S. Congress passed a resolution, the Authorization for Use of Military Force (AUMF), that grants the president significant leeway in these matters.

• The AUMF allows the president to use all “necessary and appropriate force” against terrorist forces. Crucially, the president is also given the power to identify these targets and decide the actions to be undertaken against them.

• The AUMF empowers U.S. forces to strike terrorist groups anywhere in the world. Under its umbrella, drone strikes or special forces raids in Mexico could be legally justified, at least from a U.S. lens.

• Since 2001, the U.S. has wielded this framework in at least 22 countries, despite pushback from nations like Pakistan, Syria, and Libya.
  
  

Flashpoint: Trump is poised to take bold steps against the Mexican cartels. Their grip on Mexico’s northern border has opened the door to the lucrative human trafficking trade; the risk-adjusted return on these activities is often higher than on drugs. Though Trump has vowed to wage war on the fentanyl epidemic, this measure appears aimed at tackling the border crisis. 

• Cartels play a pivotal role in illegally smuggling migrants into the U.S. through tunnels also used for drug trafficking.

• Claudia Sheinbaum, whose administration Trump has rightly accused of being rather soft on cartels, has drawn a firm line: Mexico, she says, will not tolerate military intervention on its soil.

• Far from welcoming U.S. cooperation to combat the drug trade, Sheinbaum has deemed such actions a “direct violation” of Mexico’s sovereignty.
  
  

Yes, but: While FTOs in the Middle East and Africa have had a more visible impact on the U.S., drug cartels are responsible for more American deaths than groups like ISIS or Al Qaeda. Geographic proximity forces the U.S. to act decisively, especially given the Mexican government’s apparent inability or unwillingness to rein them in.

• The CIA and Pentagon have already deployed MQ-9 Reaper drones to monitor cartels within Mexico. These could be armed for targeted strikes.

• As far back as 2020, Trump floated the idea of bombing drug labs in Mexico.
  
  

On the radar: While the U.S. will weigh all possibilities, a full-scale military invasion of Mexico is inconceivable. Special forces and intelligence service can, however, be expected to adopt a more assertive role through covert missions and limited military actions, justified under the “counterterrorism” banner, much like operations in the Middle East.

• Sheinbaum will have to grapple with the reality that in Trump’s eyes, intelligence-sharing and bolstering Mexican law enforcement are a failed, inadequate model.

• The Mexican president faces a stark choice: offer support for joint operations or tolerate Trump’s moves—or risk sparking yet another crisis with her powerful neighbor.

• Caught in a diplomatic balancing act to avert a trade war, which appears to be about to materialize regardless, Sheinbaum is left in a difficult position as Trump continues to ramp up pressure on U.S.-Mexico relations.