What President Trump’s intervention means for the conflict between Venezuela and Guyana

The Trump administration’s military intervention in Venezuela is expected to fundamentally reshape regional risks, including the South American country’s territorial claims to vast resource-rich areas in neighboring Guyana.

The US operation on January 3 to oust Venezuelan President Nicolás Maduro and his wife, Cilia Flores, shocked the world, with many condemning the US action as a violation of international law.

President Donald Trump dismissed such concerns, saying in a recent interview with the New York Times that he “doesn’t need international law” and that only his own death and mind can stop him.

Regionally, analysts told CNBC that Venezuela’s long-standing claim to the Essequibo territory is expected to be frozen in the fallout from the U.S. intervention. He said the development likely caused a collective sigh of relief among energy majors operating in the region.

Essequibo refers to the disputed territory that covers approximately two-thirds of Guyana. It is known for being rich in natural resources such as gold and diamonds, as well as having vast offshore oil reserves.

“There must have been a sigh of relief in some offices, especially on the ground, because a threat is always a threat, whether you’re trying to manage things like logistics or ensuring the safe passage of ships,” said Eileen Gavin, principal Americas analyst at risk intelligence firm Verisk Maplecroft.

“These are all offshore facilities, very expensive ones. So having a U.S. armada, as they call it, is certainly beneficial,” Gavin told CNBC by phone.

US oil major exxon mobil and chevronChina’s CNOOC are some of the companies operating in offshore areas controlled by Guyana.

The US president, who announced on Friday that he had called off a second wave of attacks on Venezuela, is calling on US oil companies to invest billions of dollars in the country to make the most of its vast oil reserves.

President Trump has argued that large “fleets” of ships off the coasts of oil-rich countries could protect U.S. investments.

Guyana has been transformed by the economic boom of the past decade.

ExxonMobil’s blockbuster discovery in 2015 uncovered vast reserves of high-quality crude oil in waters off the coast of Guyana, turning the small South American nation of about 830,000 people into a major energy company with the world’s fastest-growing economy.

The discovery attracted the attention of foreign investors and oil majors, as well as neighboring Venezuela, which claims sovereignty over the Essequibo region.

The conflict over Essequibo has been going on for more than a century. In 1899, when Guyana was still under colonial rule, the International Court of Arbitration granted the territory to Britain. Venezuela has since actively contested this. President Maduro has previously accused Guyana, the United States and oil companies of seizing territory from Venezuela through “legal colonialism.”

Guyana maintains the agreement is legal and binding, and in 2018 asked the International Court of Justice (ICJ) to rule as such.

The ICJ also issued a binding order in May prohibiting Venezuela from holding elections in Essequibo, a ruling rejected by Maduro’s government. Caracas has repeatedly stated that it does not recognize the ICJ’s jurisdiction.

Venezuelan President Maduro has taken an increasingly aggressive stance toward Essequibo in recent years, increasing tensions in the region.

For example, in late 2023, Venezuelan electoral authorities announced that the people had approved a referendum called by the Maduro government to assert sovereignty over Essequibo, raising concerns about a possible annexation attempt.

Allen Good, director of equity research at Morningstar, said Maduro’s claims against Essequibo were always more likely to have been bullshit than actionable.

“Venezuela is already in the crosshairs of the United States, and Exxon is Guyana’s largest carrier, so any attack is likely to provoke a U.S. response,” Good told CNBC via email.

“Now that the United States is trying to take control of the country, Venezuela’s actions have become even more remote and less of a nuisance to Exxon and Guyana,” he added.

Last March, at a press conference alongside Guyana’s President Irfaan Ali, US Secretary of State Marco Rubio warned of the consequences if Venezuela moved to attack Guyana or Exxon Mobil, and threatened to use military force.

Immediately after the U.S. military operation in Venezuela, Mr. Rubio spoke with Mr. Ali of Guyana about increasing bilateral security cooperation.

Guyana’s Foreign Minister Robert Persaud said in a statement on January 6 that Ali reiterated Guyana’s “firm commitment to working with the United States, our strategic and important security ally in the region.”

Notably, Persaud said Ali also welcomed Rubio’s “reaffirmation of continued support and partnership with Guyana to protect the sovereignty and territorial integrity of the United States.”

For Verisk’s Gavin, the U.S. military operation in Venezuela appears to have temporarily suspended Venezuela’s territorial claims to Essequibo, rather than completely eliminating them.

“I don’t think this conflict is going to go away. This is a long-standing claim of Venezuela, (and) the regime still exists,” Gavin said.

“But obviously, Caracas is currently under strong pressure from the United States, so I don’t think they want to make a fuss about this anytime soon,” she added.

—CNBC’s Lee Ying Shan contributed to this report.