The Good, The Bad and the Ugly? Understanding the Americas axis

Key Takeaways:

• The U.S. seizure of Venezuelan-linked tankers represents an escalation in sanctions enforcement and maritime attacks.

• Actions increasingly resemble blockade-like measures, which some observers argue could constitute an act of war under international law.

• Latin America is deeply divided, with left-leaning governments condemning U.S. actions and right-leaning governments cautiously aligning with Washington.

• Venezuela’s economic vulnerability, driven by near-total dependence on oil exports, makes it highly exposed to further U.S. pressure.

• An effective disruption of Venezuelan oil exports would likely trigger economic collapse, renewed mass migration, and strengthen criminal networks.

• Regional spillover risks include energy shortages, inflation, migration pressures, and security deterioration in border areas.

• Political violence against Venezuelan dissidents, and to both detractors and sympathisers of the Monroe Doctrine abroad highlights the transnational security risks associated with further escalation.

• Absent de-escalation, the medium- to long-term outlook points toward greater instability and fragmentation across Latin America.

Contextual Background

On 02 September 2025, the United States (US) military carried out its first strike on a small vessel in the Caribbean Sea that it claimed was involved in drug trafficking from Venezuela. President Trump stated that the attack targeted an alleged drug-smuggling boat and that those on board were connected to organised crime. The administration released video of the strike. These attacks have continued ever since September and remain ongoing as of December 2025.

A breaking point was reached when the US seized the vessel Skipper, which reportedly concealed or falsified its maritime location data to obscure its activities on a repeated basis. Skipper broadcast misleading Automatic Identification System (AIS) signals to appear in locations far from where it was, including false signals near Guyana, while satellite imagery showed the ship at Venezuela’s José oil terminal. The administration quickly announced additional operations against vessels it described as part of “narco-terrorist” activities. By December 2025, many such attacks had taken place in Caribbean and Pacific waters, resulting in dozens of deaths.

The renewed hostilities stem from a major accusation; the US under President Donald Trump accused Venezuelan President Nicolás Maduro of heading or tolerating powerful drug trafficking networks (especially the Cartel de Los Soles). Washington designated these networks as terrorist organisations, increased rewards for information leading to Maduro’s arrest, and maintained tough sanctions.

In addition to this, the US Department of State has claimed that Venezuela does not meet the minimum standards for the elimination of human trafficking and has not demonstrated meaningful progress toward doing so; accordingly, it remains classified as Tier 3. Equally, the United States does not recognise Nicolás Maduro or his representatives as the legitimate government of Venezuela and instead supports the 2015 National Assembly and the Venezuelan people in their pursuit of a stable, democratic, and prosperous country. As recently as 16 December 2025, the United States has ordered the blockade of oil tankers in and out of Venezuela. The implications for global oil trade remain uncertain and have yet to be fully assessed, with current commentary limited to preliminary forecasts. Currently, Venezuela faces acute pressure as crude exports are restricted and it can no longer reportedly resort to illicit activities to circumvent sanctions and other scrutiny measures, especially considering enhanced US military actions.

Equally, the seizure of Skipper, an already sanctioned Venezuela-Iran linked VLCC offshore Venezuela, signals a significant escalation in U.S. enforcement at sea and makes it highly likely that Washington will continue targeting vessels linked to Venezuela–Iran sanctions networks, almost certainly widening the risk profile for shipping connected to Venezuela. While Venezuela itself is unlikely to military retaliate (at least, directly) due to the heavy U.S. naval presence and the risk of escalation, Iran is assessed as more likely to respond, increasing the threat to U.S-affiliated shipping, particularly laden crude oil tankers.

As a result, U.S.-owned, operated, chartered, or U.S.-bound vessels face heightened maritime risk, especially in the Arabian/Persian Gulf and Sea of Oman, where Iranian retaliation has occurred in the past. Shipping companies with U.S. exposure are advised to reassess routing, security measures, and risk tolerance, as the seizure sets a precedent that could lead to further interdictions and spillover risk across key global energy transit corridors.

The no longer Mexican stand-off does not merely involve the United States and Venezuela, if it ever did; Washington’s 2025 National Security Strategy clearly defines a favourable plan for those that entirely reject their rivals in Latin America and align with the White House’s line of strategy.

From the macro to the micro level, the geopolitical disputes are starting to permeate and influence day-to-day business operations and civilians:

On 13 October 2025, two Venezuelan exiles in Bogotá, Colombia (human rights activist Yendri Velásquez and political consultant Luis Peche Arteaga) were shot in a targeted attack as they left a building in the city’s north. Both survived after surgery and were reported to be in stable condition. The assailants were described as unknown individuals in a vehicle who fired multiple shots at close range. Colombian authorities opened an investigation; the two men were part of a broader wave of political opposition figures and civil society leaders who left Venezuela after President Maduro was widely accused of rigging last year’s election and authorities detained more than 2,000 individuals, including human rights defenders and government critics. 

Civil society leaders described the attack as likely targeted based on the activists’ political profiles. Colombian authorities opened an investigation, but initial public information did not identify the perpetrators. Their presence in Colombia reflects the broader Venezuelan diaspora’s response to internal repression, including forced exile by activists and political actors. If US and Venezuela tensions do not de-escalate, heightened concerns that Venezuela dissidents remain at risk even in exile, amplifying fears among the diaspora of political targeting outside Venezuela itself as observed in Bogotá. Incidents of this nature cannot be ruled out against Venezuelan dissidents domestically and abroad, as well as US nationals or sympathisers across allied countries (to the Venezuelan regime) in Latin America. Colombia is now on the spotlight; as recently as 16 December 2025, the US State Department designated Clan del Golfo as a terrorist group and will continue to exert both economic, security and diplomatic pressure.

This classification belongs to Trump administration’s strengthened efforts to combat drug trafficking and its effect on US homeland security. That very same day, in Cali (southwestern Colombia) 2 members of the Colombian National Police were killed when an explosive device detonated. Colombian authorities said the attack was carried out by the Ejército de Liberación Nacional (ELN) guerrilla group, which has acknowledged responsibility and framed the violence as part of an armed strike protesting what it describes as an expansion of U.S. military presence and cooperation with Colombian forces. The ELN announced the armed strike in a statement, saying it was protesting President Donald Trump’s “imperialist intervention threats” toward Colombia. This stance came after Trump suggested that cocaine-producing countries such as Colombia could be subject to attacks. In early December, the group warned President Gustavo Petro that Colombia “would be next,” without providing further details. To this, the Colombian President ordered an offensive against the organised group, labelling it a national threat.

Future attacks and further discontentment are likely to re-emerge in the short to medium term as a result [0- 24 months] unless major de-escalation occurs.

Future outlook:

The divide and conquer policy in Latin American is not new; after the far-right has won the elections in Chile, the polarisation that has been predicted for years has finally permeated the government.

Trump has taken smaller steps against other reportedly cocaine-producing, left-leaning countries; in September 2025, the U.S. Department of State also published a Presidential Determination that listed Bolivia (alongside other countries including Venezuela) as having “failed demonstrably” to adhere to international narcotics control commitments. The primary mechanism the U.S. uses against Bolivia in the anti-narcotics context is decertification; but given Bolivia’s recent comments on US military behaviour, it is probable that Bolivia faces more scrutiny in the medium term [0-24 months].

Another (albeit smaller compared to some of its neighbours) reported cocaine- producing country is Peru, now in the hands of a centre-right government rule. Different to its more unruly equals, Peru is unlikely to witness the same persecution as a result.

As a matter of fact, in early December 2025, U.S. Secretary of State Marco Rubio and Peru’s Foreign Minister Hugo de Zela met in Washington, D.C., to reaffirm bilateral cooperation against organised crime and drug trafficking.

In the face of US actions and their inherent political misalignment, Colombia is the most affected after Venezuela; has taken a clear antagonistic stance against Trump which led us to believe that no future partnership on the fight against narcoterrorism and collaboration is likely to happen in the short term [0-6 months]. If Colombia continues to assert its criticism against Trump’s foreign policy, a harsher stance against Colombian firms and civilians is expected.

As of 09 December 2025, the Treasury’s Office of Foreign Assets Control (OFAC) has already imposed sanctions on four individuals and four entities (predominantly Colombian) for their role in the war of Sudan. It is likely that the United States places more legal and compliance restraints on Colombian entities affecting businesses and transactions over geopolitical differences.

On 24 October 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) added Colombian President Gustavo Francisco Petro Urrego to the Specially Designated Nationals and Blocked Persons (SDN) List under Executive Order 14059, citing his involvement in the global illicit drug trade. OFAC also designated President Petro’s wife, Verónica Alcocer; his son, Nicolás Petro; and Colombia’s Interior Minister, Armando Benedetti. The designation followed President Trump’s 15 September 2025, determination that Colombia is among the countries classified as major drug transit or major illicit drug–producing nations pursuant to Section 706(1) of the Foreign Relations Authorization Act. Foreign and domestic businesses operating in Bogotá and in the wider Colombia are to proceed with caution; especially if engaging with the Colombian government and undertaking deals with President Petro and other blocked persons.

To evaluate and mitigate potential risks for business in Bogotá, companies engaged in Colombia-related activities may wish to consider the following measures:

Sanctions screening: Conduct screening of all parties involved in Colombia-related activities. In addition, prior to meetings or negotiations, identify all participants and screen their names against OFAC’s SDN List.

Training: Deliver updated sanctions training and practical guidance to teams working on Colombia-related matters to reduce the risk of prohibited interactions with sanctioned Colombian persons.

Due diligence: Review points of interaction with the Colombian government, including evaluating contractual arrangements, avoiding certain transactions where appropriate, and periodically reviewing the ownership and management structures of counterparties. Where ownership or control is unclear, transactions should be escalated to sanctions counsel or compliance personnel for further review.

Compliance representations, undertakings, and certifications: Review and, where feasible, update contractual documentation to include strong sanctions-compliance representations and termination rights, or otherwise obtain appropriate sanctions-compliance certifications from counterparties.