Russia loses Venezuela, its avocado ally

Six years ago, the Kremlin indicated it would be willing to drop its support for Nicolás Maduro in Venezuela in exchange for some freedom of action in Ukraine, Fiona Hill, an adviser to President Donald Trump, said during a congressional hearing in 2019.

In the first week of January, sleeping through the Christmas and New Year break, Moscow lost this bargaining chip and more.

Russia's direct financial losses from what is now likely to be Moscow's complete withdrawal from Venezuela are expected to be minimal, despite the Kremlin's longstanding support for Caracas and frequent promises of investment. The political and symbolic costs could be far more damaging.

The Kremlin has lost a good and loyal friend in the Venezuelan regime, but that was not enough to make Putin forget his basic realpolitik. Allies are useful, but not critical. They are not important enough to antagonize President Trump, without whose goodwill Russia cannot expect a favorable exit from its Ukrainian disaster.

The Kremlin began actively courting Venezuela in the mid-2000s, viewing Hugo Chávez's socialist state first as an economic partner and then as an "unsinkable aircraft carrier" off the American coast.

After the invasion of Ukraine in 2022, relations with Caracas reached new heights. Just two months after the war began, Maduro called Putin to discuss “countering the Western campaign of lies and disinformation” and called the Ukrainian government “a neo-fascist elite,” parroting various points of Kremlin propaganda.

In the summer of 2022, Venezuela’s Vice President, Delcy Rodríguez, now the country’s leader, attended the St. Petersburg International Economic Forum when almost everyone else stayed away. In her speech, she said that the barrage of Western sanctions “opens up new horizons for us.”

As if to confirm Rodríguez's words, the first shipment of Venezuelan avocados arrived in Russia in September and Russian tourists began to vacation there.

The mutual love continued unabated. Last year, Maduro attended the 80th anniversary of Victory Day celebrations in Moscow, where he met with Putin and declared: “A beautiful harmony reigns between Russia and Venezuela. We will see the flourishing of relations between great Russia, today a leading power of humanity, and Venezuela.”

The presidents signed a 10-year partnership agreement, which Venezuelan official media hailed as proof that the country was "Russia's main partner in the region."

On the surface, cooperation between the countries flourished. More than 350 bilateral agreements were reached, covering defense and security, intelligence and aviation, nuclear energy and vehicle manufacturing, and even the integration of financial systems.

A jointly owned bank, Evrofinance Mosnarbank, opened in Caracas and, in 2024, the countries announced that Venezuela would begin accepting cards issued by Russia's Mir payment system.

In reality, however, Russia's friendship with Venezuela yielded little more than avocados.

Politically, Caracas could not even support Russia in votes at the UN (Venezuela does not have a vote due to its debts to the organization). Economic cooperation did not go much further, with one notable exception: Russian weapons, paid for with Russian loans.

According to the Venezuelan branch of Transparency International, during the oil boom years of 2004–2018, Russia gave Venezuela $34 billion, mostly to buy and maintain weapons. The Stockholm International Peace Research Institute (SIPRI) found that during this period, Venezuela was the top importer of Russian weapons.

Maduro regularly displayed Russian air defense systems in military parades — although, when they were urgently needed during Russia’s own “special military operation,” they failed miserably. Experts said this could be attributed to both Venezuelan and Russian incompetence.

Venezuela also relied heavily on Russian support to circumvent US oil sanctions, until Moscow also ran afoul of them. Rosneft was the main Russian player in Venezuela, and its director, Igor Sechin, was a personal friend of Chávez.

Following the imposition of US sanctions, Venezuelan state oil company PDVSA moved its European office from Lisbon to Moscow in 2019. By the end of that year, the US acknowledged “the growing dependence of PDVSA and the Venezuelan regime on Russia, the Russian government and Rosneft.”

Rosneft was a major investor in the country and was actively engaged in oil exploration and production. In 2020, the company officially announced that it was ceasing its operations in Venezuela due to US sanctions. It sold its Venezuelan assets to a specially created Russian state-owned operation: Roszarubezhneft.

By 2022, its five joint ventures were supplying 125,000 barrels per day, significantly less than originally planned. In 2014, Rosneft’s two largest projects alone were expected to produce 450,000 barrels per day. In total, estimates put Rosneft’s losses in Venezuela at between $6 billion and $9 billion.

The flow of Russian loans and investments was blocked first by sanctions on Venezuela and then by sanctions on Moscow after Russia invaded Ukraine. Since 2018, Russia has not publicly announced any new loans to Venezuela, and most joint projects — from building an automobile factory to developing a cartridge factory — have yielded no results.

Trade between the two countries barely exceeds $1 billion a year, much less than Russian trade with China, Brazil, or Argentina.

Overall, despite the warm words, Russia has not lost much economically from the regime change in Caracas. There was little chance that the loans would be repaid even before Maduro's fall. Arms sales have stalled due to the inability of the Russian military-industrial complex to export during the war, and oil projects are no longer commercially attractive.

As with Bashar al-Assad in Syria, the loss is more political than commercial or financial. Its investments in Venezuela are likely to be lost, even if they existed only on paper in the first place.

For the second time in two years, Russia has been unable to defend a close ally and has lost another foothold in a key region. It has also been stripped of the hypothetical opportunity to trade influence over Venezuela for concessions from the White House on Ukraine.

Alexander Kolyandr is a Non-Resident Senior Fellow at The Center for European Policy Analysis (CEPA), specializing in Russian economics and politics. Previously, he was a journalist for the Wall Street Journal and a banker for Credit Suisse. He was born in Kharkiv, Ukraine, and lives in London.

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