It took six days after D-Day on June 6, 1944 before the allies secured all five beaches in Normandy. It took another 45 days until the allies captured the city of Caen, an early major target.
We don’t expect Maduro to last even that long as the standoff now moves into a new phase. Expect to hear more about “protection” of the Venezuelan people in the coming days.
On Saturday, Maduro blocked humanitarian aid truck convoys carrying food and medical aid from entering into the country (photo credit above via US State Dept.). While the opposition government would have been overjoyed if the aid had made it into Venezuela and had begun distribution to people in need, the blocking and use of force scenario that unfolded yesterday was also expected.
In our view, Maduro should have allowed the aid to enter into the country. It probably would not have provided a reprieve from the opposition plan to oust him from power but by blocking and burning the aid, Maduro has only expedited his eventual departure.
We monitored events all day Saturday at the borders via live-stream and communicated with contacts on the ground as well as in the Trump Administration. No one in Washington was surprised Maduro took this route to block the aid, likely due to intelligence reports. In fact, we believe the administration had already prepared for it.
There were five deaths reported and many others injured. The violence largely occurred, not from the Venezuela military that mainly served as blockers Saturday, but instead from the “colectivos,” armed plain-clothed gangs of the Maduro regime. The colectivos were essentially terror squads deployed along the border yesterday and were likely responsible for setting the aid convoys on fire.
Whether Maduro purposely planned to have the plain-clothed colectivos fire on the aid caravans and volunteers or the military would not agree to initiate the violence, the colectivos are now definitely in Washington’s radar-screen and crosshairs.
It is true that interim President Juan Guaido and the opposition hopes that Maduro can be ousted through a non-violent uprising of people power that convinces the military to disavow Maduro and switch sides. The opposition is trying to be very careful not to appear to be taking orders from the US. You saw that in the appointment of Venezuelans to head the new PDVSA and Citgo boards over objections from some in the US government. But more importantly, the aid convoys were also a nod to the opposition’s preferred game plan.
Clearly the Trump Administration is providing extensive support and impetus to the opposition’s efforts to oust Maduro, and in close coordination with Colombia and Brazil. It is now one of the highest priorities of the White House, even as the President departs this week for the summit with North Korea.
Based on public comments Sunday morning, Guaido and the opposition now seem emboldened and resolved to take tougher measures. Guaido will meet with Vice President Pence who travels to Bogota for a meeting with the regional governments of the Lima Group. No doubt, Pence will have strong words of condemnation for Maduro and call on him to step down. Reuters reported Sunday afternoon that Pence will announce the next “concrete steps” and “clear actions.”
We expect the Lima group meeting to discuss the next phase of the effort, and it is important that it appear to be a regional response and not a US-centric one. There is great concern about the humanitarian crisis in Venezuela, which has in turn created a massive refugee situation in Colombia and Brazil. Therefore, we think you will start to hear more about the need to “protect” the Venezuelan people from Maduro.
Also, we have detected a new concern about a spillover of violence into Colombia. Senator Marco Rubio tweeted about a report today that a Venezuelan opposition leader and his aide were poisoned at breakfast this morning across the border in Colombia. The aide has died and the opposition leader is now hospitalized.
Colombia is a key US defense ally in South America. Any attempts by Maduro and his Cuban and Russian advisors to destabilize Colombia will not be tolerated by the US and, in our view, would trigger a military response as a defensive measure. We believe the very public visit of Colombia’s military chief to US SOUTHCOM headquarters last week in Miami was both a deterrent to Maduro but also a meeting to plan for various scenarios.
Flight tracking sites have identified plenty of US military aircraft flying to and within Colombia over the last few days, including aircraft associated with US special forces. Guaido is almost certainly now receiving US security protection and logistical support.
Maduro put on a brave face yesterday during a rally in Caracas - dancing the salsa on stage while his gangs fired tear gas on the Venezuelan volunteers trying to bring food and medical supplies across the border. However, clearly Maduro and his wife were wearing bullet-proof vests under their bulky jackets on a warm day in Caracas. Also, flight-trackers identified a Turkish registered Bombardier Global Express private jet that arrived in Caracas from Moscow on Saturday, a likely escape hatch for Maduro or others in the regime (as well as to possibly deliver and/or pick up more Russian private contractors).
As we said in our Friday note, we have seen a supreme confidence from US officials we have spoken with over the last two weeks that Maduro’s exit is coming. It is more than an optimistic hope or gut feeling we see from these officials. In our experience, this is likely the result of some intelligence and intercepts of communications between Venezuelan military officials. Saturday was likely the first step of this plan, and it is clearly a carefully planned out strategy.
We are not predicting a military intervention but we think the odds are higher now after Saturday, and especially if it is provoked. We do think other alternatives are being worked including backchannel discussions with the Venezuelan military as well as third party countries who may convince Maduro about the need for an exit and can provide a safe haven (Turkey or UAE).
The bottom line is that the plan for Maduro’s ouster is now set in motion, and there is no turning back. We do not think it continues for months but instead resolved likely sooner. For oil markets, it is critical for fast action. Venezuela is running out of storage space for crude without customers. Without storage space and diluent to refine the crude for export, production will soon crater to zero making it difficult and extremely expensive to restart. It is a scenario that neither side wants to see happen.
NOTE ON UPCOMING CALL REGARDING ASSESSMENT OF VENEZUELA PRODUCTION & INFRASTRUCTURE: We will continue to monitor political events in Venezuela but we are also preparing analysis and events on the oil sector. In particular we will focus on providing an assessment of the current state of production as well as what it will take and the timing to rebuild the infrastructure. Stay tuned for a conference call we will host with a former PDVSA official and others to provide assessments and analysis.
