Venezuela tanker seizure is unexpected twist to advent calendar
DONALD Trump has kept busy since picking up the first ever Fédération Internationale des Associations de Football peace prize last week. Some of his actions sit oddly with his standing as an inveterate peacenik.
Five days later he ordered the US Coast Guard and special forces to capture a tanker off the coast of Venezuela, in a move that has ramped up both oil prices and tensions with the government of Nicolás Maduro in Caracas.
According to Trump, the 310,000 dwt Skipper(IMO: 9304667) is the largest tanker ever seized. Despite his known penchant for hyperbolic braggadocio, that designation may even be accurate.
“Other things are happening. You’ll be seeing that later and talking about that later with some other people,” he told journalists at a White House press conference.
The VLCC was sanctioned by the US in November 2022 after accusations that it undertook oil shipments on behalf of Iran’s Islamic Revolutionary Guard Corps.
Maduro has branded the capture as ‘piracy’, a word also employed by critics after Israel boarded ships crewed by activists attempting to bring aid to Gaza earlier this year.
Whatever the rhetorical force of the term, its legal weight is minimal. Neither case seems to exemplify the threshold set down in the UN Convention on the Law of the Sea, which defines piracy as acts for private gain. That excludes the actions of states.
Skipper claims to be registered in Guyana; Guyana insists it isn’t. Stateless vessels are in breach of the Unclos mandate for all ships to have a flag state, making it a legitimate subject for naval intervention.
But whatever the legal considerations, the political and military context is vastly more important.
Ever since the promulgation of the Monroe Doctrine in 1823, the US has essentially seen the western hemisphere as its backyard.
In the intervening two centuries, it has mounted around 40 armed interventions, earning it the durable enmity of Latin American nationalists.
Some jokers in DC have labelled Trump’s foreign policy stance towards the region the Donroe Doctrine, which is a neat play of words even if it exaggerates the extent of the coherence on display.
The US has in recent months deployed substantial military assets to the vicinity of Venezuela, including the world’s largest aircraft carrier, USS Gerald R Ford and large numbers of troops, missiles and gunboats.
The Trump administration has openly declared that it wants to see the back of Maduro, whom it accuses of stealing his country’s last election and of leading a terrorist drug smuggling operation.
Maduro patently did not secure the endorsement of his electorate at the ballot box in July 2024. Opposition candidate Edmundo González should by rights now be occupying the presidential palace.
Blatant vote rigging is never acceptable and should be excoriated in democracies, an argument on which Trump will be apprised more fully than most.
That said, it is less obvious that the Cartel de los Soles actually exists. It may just be media shorthand for the tendency of Venezuelan military officers to turn a blind eye to smuggling in return for the occasional bribe.
As of now, the scale of the buildup looks insufficient for a boots on the ground invasion, and may be designed primarily to put pressure on Maduro to step down or on his armed forces to stage a rebellion.
The US occupation on Panama in 1989 provides little by way of worthwhile precedent. Venezuela is far larger and its terrain of rain forests and mountains are ideally suited for guerilla fighting. At the very least, it would be no pushover.
Recent years have seen shipowners caught up in the consequences of Russia’s invasion of Ukraine and Houthi attacks on merchant tonnage in Red Sea, ostensibly in solidarity with Hamas in Gaza.
The sudden emergence of another maritime trouble spot would be a mixed Christmas gift from the White House to global shipping.
If Venezuela’s 1m barrels per day oil exports were to fall significantly, the price of crude would increase everywhere. Given that the US is nowadays a net oil exporter, it wouldn’t hate that outcome, although net importers certainly will.
The resultant reconfiguration of the global oil supply chain is something that tanker owners probably didn’t have on the advent calendar. But politics sometimes does open the doors to the chocolate.
Disruption is often a business opportunity for those with a high risk-tolerance threshold, although not every shipowner plays their cards right every time.
Venezuela is already designated a listed area by the Joint War Committee, giving marine underwriters reserve powers to impose whatever additional war risk premiums they see fit.
There are grounds to hope that they will not invoke them immediately. Skipper cannot validly be covered by western marine insurers on account of being sanction, and there is no obvious reason for Venezuelan retaliation against third country tonnage.
As the inaugural FIFA peace prize honouree reminded us on Wednesday, other things are happening. It’s just that he has yet to tell us what they are.
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