We’ve barely begun cleaning up after New Year’s Day celebrations when the news broke of the United States attacking Venezuela, in order to take its president, Nicolas Maduro, under its custody, ostensibly to face narco-terrorism charges.
From a geopolitical standpoint, it already is messy. Many governments were initially at a loss on how to respond: while a leader widely seen as authoritarian was removed from power, it was through means that clearly went against international law. Donald Trump’s pronouncements – first, about the US “running” Venezuela in the immediate future, and then, hinting at greater American involvement in the country’s oil output – further murky the waters, not just for the region, but globally. Observers and pundits are anxious about the more explicit return of the “spheres of influence” model globally, where one regional superpower muscles its way around its neighbors.
From a supply chain perspective, there is a lot to think about, even if these events are half a world away. Much like when Russia invaded Ukraine in 2022, or when tensions between Israel and Iran reached a boiling point last year, the ripple effects go far and wide.
One obvious example is oil prices. Venezuela is home to one of the world’s largest oil reserves, and as a member of OPEC, has significant influence in oil prices globally. Trump has pretty much made no secret of his interest in that, and any moves towards hoarding supplies will distort prices, hitting oil importers like the Philippines particularly hard. As I write this, the effect has been minimal, but there’s still no telling where this will go in the medium to long term.
Another potential impact is on the movement of global trade. We’ve already experienced this in recent years: the diversion of air cargo flights to avoid Ukrainian airspace, for example, or cargo ships avoiding the Strait of Hormuz to not be at the behest of Houthi rebels. Longer trips, of course, mean longer delivery times and higher logistics costs. Here, we rely on Trump’s other pronouncements – in particular, his expressing interest in reclaiming the Panama Canal, a major trade route, for the United States. Imagine the disruption any conflict in that area would cause.
And what about other countries? Just before the end of 2025, China held military exercises around the waters of Taiwan, which it considers to be one of its provinces. If China is emboldened by Trump’s example and takes back control of the island by force, there will be great disruption to global supply chains – and not just in the industries that are heavily based there, like electronics. And what about the South China Sea, and China’s nine-dash line? What if – and I very much hope not – the Philippines is subjected to a military attack?
But then, the waters are murky. There are valid fears about superpowers taking the new Trump template and running with it, of coercing its neighbors to follow its will. It is easy to see how the “spheres of influence” model prevalent in the early part of the last century can get in the way of our modern understanding of global trade and movement. But, for now at least, there remains an incentive for countries to present themselves as maintaining the current world order – just take how China, in its pronouncements, stresses its support for global cooperation.
Don’t get me wrong. I am not taking one country’s side or the other. The picture I am trying to illustrate is one of, once again, uncertainty on the global stage. Just when we thought we could see some degree of predictability, after regional tensions have somewhat settled down, here we are again, back to doomsday scenarios and all-out anxiety. Emboldened by the Venezuela operation, the US is once again looking at Greenland. Russia is also toying with what it can do. So many things are at play. As supply chain stakeholders, whether we are importing raw materials or delivering finished goods, we have to be ready for all the possibilities. The ripple effects will be far and wide. Are we prepared? And no, I won’t tell you how – by now we should all have an idea of what tools we have at our disposal.
Henrik Batallones is the marketing and communications director of SCMAP, and editor-in-chief of its official publication, Supply Chain Philippines. More information about SCMAP is available at scmap.org.
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