[Editorial] Closely Monitor the Global Economic Impact of the Venezuelan Crisis

A major incident has shaken the international community at the start of the year. The Trump administration in the United States of America (USA) has abruptly arrested Venezuelan President Nicolás Maduro and extradited him to the USA. This military operation, named Operation Absolute Resolve, is far from a simple regional dispute. It contains clues that could have a profound impact on the global economy. For a country like ours, which must strengthen its national competitiveness amid global economic uncertainty, it would be unwise to take the economic implications of this crisis lightly.
Above all, the economic shock resulting from this situation must be closely monitored. In particular, attention should be paid to both the short- and long-term trends in the crude oil price. The Bolivarian Republic of Venezuela holds the world’s largest crude oil reserves. Although its output has declined significantly compared to its reserves, it remains a key player in the global oil market. Notably, President Donald Trump has mentioned the reconstruction of the Venezuelan oil infrastructure. Should American oil companies begin full-scale entry into the Bolivarian Republic of Venezuela, the supply and demand structure of international crude oil prices could shift. Changes in crude oil prices have a significant impact on corporate production costs and inflation in various countries. Depending on how the political situation in the Bolivarian Republic of Venezuela unfolds, the ripple effects on the global economy will also vary.
It is also important to observe whether there will be a rush toward safe assets in the Financial Market. The USA’s operation is certain to spark international legal controversy. As geopolitical uncertainty rises, capital tends to flow into safe assets such as the US dollar, Gold, and government bonds. The resulting volatility in the Financial Market could trigger a domino effect on the South Korean won and the stock market index.
Political and economic instability across Latin America as a whole could also dampen global markets. If the Venezuelan crisis drags on or spreads to neighboring countries, a contraction in global investment sentiment will be inevitable. Given the significant spillover effects of the Bolivarian Republic of Venezuela’s problems on South America, risks to production and consumption in the region will not be insignificant. Especially considering that President Donald Trump has sent warning messages to the Republic of Colombia and the Republic of Cuba, the entire Latin American region could enter a period of heightened tension.
The accelerating reorganization of the global supply chain is another point of concern. China has expanded its influence in Latin America through the Belt and Road Initiative (BRI) and the expansion of BRICS. The USA has imposed sanctions on four Chinese companies doing business with the Bolivarian Republic of Venezuela. Analysts view this as a move to curb China’s growing influence in Latin America.
The essence of the power struggle between the USA and China lies in securing the global supply chain. The issue is that our economy maintains close ties with both the USA and China. It is essential to carefully assess how this restructuring of the supply chain will affect our companies.
The Trump administration’s intervention in the Bolivarian Republic of Venezuela is sounding a serious alarm for the global economy from the very beginning of the year. We must not dismiss this as a distant issue happening across the Pacific. It is time to thoroughly analyze the potential impacts on our economy—including crude oil prices, exchange rates, and supply chains—and proactively identify areas requiring a response. Strengthening energy security should be a top priority. In addition, the risk management system for the global supply chain must be reassessed. As the conflict between the USA and China intensifies, we must secure strategic autonomy to protect our national interests without leaning toward either side. In this era of uncertainty, only thorough preparation can turn crisis into opportunity.