The first domino of regime change in Venezuela has been toppled, as the Trump administration has imposed a naval blockade on the main oil export ports.
No oil exports mean Venezuela’s income vanishes. That means food imports stop. Food shortages will give way to unrest, which will give way to regime collapse. So, what kind of situation will we be looking at once the final domino falls and Maduro relinquishes power?
It’s not going to be pretty. We’re talking about a grim humanitarian outlook, a scary security picture, and an ugly transition of power.
Hey, all. Peter Zeihan here coming to you from Colorado. It is the 17th of December. You’ll see this on the 18th in the morning. And we are. Go for regime change in Venezuela. The Trump administration has started a formal blockade of the ports, specifically to prevent the state of Venezuela from generating any foreign currency, which is used to not to support the regime but hold the country together.
There are three ports. There’s one just off of Caracas, which is the really minor one. There’s two larger ones, to the west, and east of the country. There’s no interconnection of the oil pipelines among the three. So you basically have fields in the markova region that generate somewhere between one fifth and one third of the country’s crude, very easy to block.
There’s a very narrow network. Basically, you can do that with one ship and you’ve got to Port Jose out on the east side, which is where about two thirds to three quarters of the exports flow. That’s a little bit more difficult. But again, for the US Navy, this is very, very, very minor. Not hard to do at all.
And so Venezuela is now going to go from a country that exports about a million barrels a day of crude to one that exports none. And this is something like 90% of the hard currency earnings of the country. And that money is what is used to maintain the regime and to purchase the roughly 80% of the country’s food that is imported.
So within a matter of days, we’re going to be having food riots because they really don’t have much stored up. And then without the currency, you we’re probably going to see the regime start to crack. A couple things to keep in mind. First, locally in Venezuela and then the broader world. Number one, this is a country that is armed to the teeth.
That doesn’t mean that I think that it helps the government. But back under Chavez, over a million ak47s were handed up to the population. And so any force that goes in or any force that’s local that tries to assert authority, regardless of their political backdrop, is going to have a horrific time. And we’re not so much looking at a civil war or a civil breakdown, in a country with over million people.
So the outcomes for Venezuela are beyond dire, and we should expect a general breakdown of civilization here over the course of the next several months, unless the Trump administration changes its mind really aggressively. You’re not going to have a foreign force that can put this right. You’re not going to have a local force that can maintain authority.
There just too many weapons in too many hands for that to be one of the reasonable options. Which brings us to the second thing, that the oil that comes out of Venezuela is going to go away for at least several years. Right now that’s only a million barrels a day. But something the Trump administration has shown is that we can now have a sovereign state going specifically after oil tankers of the shadow fleets.
And a lot of these tankers don’t just service Venezuela, they also service Iran and Russia as well. And we have now broken the Seal and other countries, or maybe the United States as well, is probably going to start going after those other shadow tankers as well. A 1 million barrels per day disruption out of Venezuela for a market that is at the moment probably oversupplied is not a big deal.
But then you add another million from Iran and perhaps as many as 4 or 5 million from Russia. And you’re talking about a very different world. So we are at the start of a very significant international shock in energy. And calendar year 2026 is going to be a wild ride.
