Max Lim, Partner, and Akshay Misra, Managing Associate, from international law firm Penningtons Manches Cooper on Tuesday (13 January) gave an overview on recent developments in Venezuela and how they impact shipping and trade: 

The ongoing situation in Venezuela, involving a combination of military action, asset seizures, and geopolitical tensions, has emerged as one of the most consequential flashpoints in modern history, with profound implications for global shipping and trade.

The recent enforcement actions underscore the significant ambiguities in international law, particularly around the limits of flag state protections and the extraterritorial reach of sanctions. These uncertainties are driving insurers to recalibrate coverage for high risk regions, while legitimate operators face heightened contractual risks due to potential delays, rerouting, and inspections.

What we know so far

On 7 January 2026, it was reported that US forces had seized two oil tankers linked to Venezuela, pursuant to a US federal court warrant on sanctions-related grounds. One of the tankers was Russian flagged, seized after a pursuit across the North Atlantic, following reported attempts to evade a US blockade on sanctioned tankers.

This is a rare instance where the US has taken a foreign-flagged vessel, citing breaches of US sanctions. Russia has understandably condemned the seizure as a violation of international maritime law.

These seizures form part of a sustained campaign that has targeted multiple vessels in recent weeks, including earlier interdictions of tankers attempting to transport Venezuelan oil or evade sanctions enforcement.

Notably, these latest seizures by the US come hot on the heels of its capture of Venezuelan president Nicolás Maduro on charges including alleged drug trafficking.

Implications for shipping

The developments mean a heightened risk of interception, even for vessels flying under a foreign flag outside of US territorial waters, if they are found to have moved sanctioned Venezuelan oil or attempted to evade a blockade.

Venezuela’s national ports have moved to ISPS security level 1. Imports and exports by non-sanctioned vessels are permitted, but strict documentation checks persist.

Vessel movements into and out of Venezuela are delayed due to a reported slowdown in port inspections and clearance procedure.

Implications for trade

The Venezuelan state oil company has halted all oil sale operations, though exports of other raw materials like iron ore continue.

Venezuelan cargoes remain stranded on tankers or in storage, unable to discharge due to enforcement activities and the associated risks.

New ambiguities around flag state protections

The situation has highlighted the growing uncertainty over the legal protections traditionally offered by flag states; in particular, the seizure of foreign-flagged vessels outside US waters raises questions about the robustness of flag state jurisdiction in shielding operators from extraterritorial enforcement. This ambiguity is likely to attract increased scrutiny from insurers, classification societies, and port authorities, who may demand enhanced compliance evidence before granting clearances or coverage.

Insurance and high risk regions

Insurers are expected to recalibrate coverage terms for voyages intersecting high risk zones.

Longer term implications include:

• higher premiums for routes near enforcement zones;
• expanded exclusion clauses for sanctions-related risks;
• mandatory due diligence on cargo origin and flag history. Operators may increasingly seek bespoke war risk and sanctions compliance endorsements to mitigate exposure.

Contractual risks for legitimate operators

Even compliant operators face elevated contractual risks, including:

• delays from rerouting or extended port inspections;
• potential disputes over force majeure clauses if enforcement disrupts schedules; and
• increased exposure to penalties under charterparty performance obligations. Operators should review contracts for flexibility on sanctions-related delays and consider adding protective clauses.

Ripple effects on international trade

The Venezuelan crisis is reverberating beyond the oil markets, with wider effects including:

• the disruption of supply chains for raw materials like iron ore;
• increased freight volatility as vessels avoid enforcement zones;
• pressure on global commodity pricing and insurance markets;
• potential diplomatic friction affecting bilateral trade agreements.

Sanctions

OFAC continues to administer a broad regime of sectoral and targeted sanctions on Venezuela. The recent seizures demonstrate that enforcement may now extend to naval interdictions outside of US waters.

The EU and the UK have also imposed sanctions on Venezuela, which were in place even before the current upheaval. These sanctions target key state-owned entities and senior government officials, and broadly restrict asset access, travel, financial transactions and investments, notably in the oil and gas sector, with an overarching aim of constraining Maduro’s financial resources.

Summary

This is a developing situation that calls for continued monitoring and heightened due diligence, and should extend to the monitoring of flag state records and historical movements to anticipate any enforcement risk. Risk management, particularly for trades that could intersect the enforcement zone, will also be key.

As the ripple effects of these events extend beyond shipping, global trade flows, commodity pricing, and diplomatic relations have all been impacted. Operators should anticipate stricter compliance obligations, enhanced due diligence requirements, and evolving insurance terms as the geopolitical and legal landscape continues to shift.

Photo credit: Shaah Shahidh on Unsplash
Published: 14 January, 2026