While the election in Venezuela may be over, the future is still not certain. There was a forgone conclusion that the incumbent government of President Nicolas Maduro may try to perpetrate some sort of electoral fraud to maintain power, and it certainly seems as though that has been the case. And yet both sides, the Chavistas and the opposition, seem to be playing a longer game and waiting to see what reactions are elicited in foreign capitals. Edmundo Gonzalez, the opposition candidate who was a stand in for Maria Corina Machado, appears to have won a majority of the votes according to exit polls and other observations. Yet he has not called on his supporters to protest in the streets. This may be a calculated move to both preserve life, as in all likelihood the protestors would be met with brute force, but also optionality. For its part, the Chavistas are also trying to fly under the radar. By only declaring Maduro the winner by 51% of the vote, they’ve acknowledged that a large part of the electorate voted against him. Although incidents of voter repression were reported, it was less contentious than many expected. For Venezuela, how the world reacts will ultimately determine if this election becomes a moment of serious change or more ‘business as usual’.

Reaction from regional governments has been, overall, rather muted, although many ideological allies like presidents Gustavo Petro in Colombia and Gabriel Boric in Chile are questioning the validity of the results. The fact of the matter is that this Venezuela election came at a very difficult time due to another election in the Western Hemisphere, that of the United States. The Biden administration will be loath to go back to the ‘maximum pressure’ strategy in the short term, the reason being gasoline prices in the US. By the time of the November elections, Chevron could be importing close to 200,000 barrels per day (bpd) of extra-heavy Orinoco belt crude to the US Gulf Coast refineries are mostly set up to run heavier crude slates, before the Trump sanctions they were importing 700,000 bpd from Venezuela. This extra 200,000 bpd of heavy crude supply would help keep a cap on gasoline prices, which are always a major issue during any US election. Most likely President Biden would look to negotiate some type of power-sharing agreement between Maduro and the opposition, which will buy him time from now until November. What happens after the US election is difficult to ascertain at this point.

Two scenarios must be considered here. The first being a Kamala Harris, or some other Democrat, victory in November, the second being a return to the White House of former president Donald Trump. In the first case, there very well may be an extension of the current policy of trying to find a modus vivendi with the Maduro regime while simultaneously working through diplomatic channels to affect some type of change. Part of this strategy would include Venezuelan crude, in some form or fashion, being available to international markets. And there is some logic to this approach. Even French president Emmanuel Macron in 2022 called for a return of Iranian and Venezuelan supply in response to Russian volumes exiting the European market after the invasion of Ukraine. Moreover, OPEC+ has continued to artificially restrict supply by extending their production cuts through to 2025 to shore up prices in the $80 to $90 per barrel range. Although the total output of Venezuela is less than a million barrels per day this is still a significant supply source, particularly for the United States, who was Venezuela’s largest costumer for decades. Those volumes being off the market put upward pressure on prices, even if only slightly so. The other advantage to this strategy is leaving a lever unpulled, essentially creating space in which to negotiate in the future.

In the advent of a President Trump victory, the situation could be much different. The smoke signals that he has been sending up regarding Venezuela seem to echo the ‘maximum pressure’ mantra that he adopted in 2019. Although he’s a businessman by background, it seems as though he would pursue a punitive strategy with the ultimate aim of removing Maduro from power totally and quite possibly landing him in a US federal penitentiary. A four-count superseding indictment unsealed in 2020 in the Southern District of New York charged Maduro and other top Chavistas with crimes spanning from importation of cocaine to the US to narco-terrorism. This, of course, is not something to take lightly. The US has demonstrated a willingness to prosecute fully former heads of state as was shown recently when Juan Orlando Hernandez, the former president of Honduras, was convicted of drug trafficking in federal court and sentenced to 45 years imprisonment. In this scenario it’s hard to see Western companies being allowed to do any type of business with the Maduro regime, and as such, PdVSA will have to rely on Chinese and Russian help to maintain what little production they still have. Without access to diluents like naphtha or condensate blends bought on the open market, the national oil company of Venezuela can’t produce the extra-heavy crude that comes from the Orinoco belt. In the past, PdVSA relied on illegal crude for condensate swaps with Iran to keep production at half a million barrels per day. Going forward there is a real question about whether the Venezuelan oil industry could survive another six years of degradation, sanctions and chronic underinvestment.

If any change occurs in Venezuela, it’s much more likely that it’s driven by regional influencers like Brazilian president Luiz Ignacio Lula da Silva. Having said that, the position that the US adopts will be replicated by other Western governments in some way and will set the global tone for how to deal with what has undeniably become yet another dictatorship in the Americas. If there has been any lesson learned by the Cuban embargo, the longest trade embargo in modern history, it’s that regimes of this nature can survive for extended periods of time and can institutionalize themselves so as not to depend on the charisma of a single leader. The time for change in Venezuela is now, but it’s not assured that it will happen. The next several weeks and months will hopefully be dynamic and fast-moving, but it’s unlikely that anything big will happen before the election in the US. That begs the question as to whether things will have stagnated to such a point by November that change cannot occur in the troubled South American country, something only time will tell.