Venezuela Suspends Energy Cooperation with Trinidad

Venezuela Suspends Energy Cooperation with Trinidad and Tobago: What It Means for Gas, Geopolitics, and LNG

Venezuela has canceled energy agreements with Trinidad and Tobago, a day after a U.S. warship docked in the country, escalating tensions between Washington and Caracas. President Nicolás Maduro said the suspension responds to Trinidad and Tobago’s “adherence to a U.S. aggression plan,” abruptly freezing work on the Dragon offshore gasfield that was intended to feed Trinidad’s Atlantic LNG complex.

What happened

Caracas announced it is “suspending all energy co-operation” with Trinidad and Tobago.
The move follows the arrival of the USS Gravely in Trinidad, part of the largest U.S. naval deployment to the region in three decades, alongside the USS Gerald R. Ford carrier group.
Earlier this month, the U.S. authorized Trinidad’s National Gas Co. (NGC) to resume work on Dragon after prior revocations affecting Shell and BP projects in Venezuelan waters.

Why it matters

Dragon gas & Atlantic LNG at risk: The Dragon tie-in was expected to bolster Trinidad’s LNG feedstock and stabilize regional gas balances. A freeze jeopardizes timelines, financing, and contractor mobilization—and could force Atlantic LNG to lean harder on alternative supplies or curtail exports if replacement molecules don’t materialize.

The geopolitical backdrop

The suspension tracks a broader escalation: U.S. forces have conducted multiple maritime strikes on suspected trafficking vessels in recent weeks, while Washington increases naval presence. For Caracas, halting energy cooperation is both a signal to Washington and leverage on Port of Spain, given Trinidad’s strategic interest in reviving LNG throughput.

Immediate implications

LNG supply

Any prolonged delay can tighten Atlantic Basin LNG availability at the margin, especially during peak seasonal demand, nudging spot price volatility higher if other outages emerge.

Project finance & timelines

Engineering, permitting, and cross-border offtake arrangements will likely be re-sequenced. EPC contractors and JV partners may seek force-majeure clarity or milestone relief.

Regional diplomacy

Port of Spain faces a balancing act: maintain U.S. alignment while preserving an energy lifeline that supports domestic industry and export revenues.

Winners & losers (near term)

Potential beneficiaries: Flexible U.S. Gulf Coast LNG, West African spot cargoes, and pipeline-linked suppliers with spare capacity may capture incremental demand.
At risk: Stakeholders tied to the Dragon commissioning schedule (infrastructure providers, service vessels, and some regional downstream users anticipating cheaper molecules).

What to watch next

Official communiqués from Port of Spain and Caracas on whether the suspension is temporary or tied to specific security pre-conditions.
License posture from U.S. agencies regarding energy transactions in Venezuelan waters.
Atlantic LNG utilization metrics and any guidance on feedstock substitution.
Naval movements and incident reports that could raise maritime insurance premiums or affect offshore operations scheduling.

Trading lens (for active market participants)

LNG & gas spreads: Watch TTF/JKM vs. Henry Hub on any Atlantic tightness; Caribbean disruptions can have outsized headline effects on prompt spreads even if fundamental volumes are modest.
Shipping: Monitor Caribbean risk premiums and potential re-routing that tightens vessel availability.
Credit: Re-price risk for entities with Dragon-linked cash flows or capex milestones; look for covenant waivers or timeline resets in disclosures.

Bottom line

Venezuela suspends energy cooperation with Trinidad and Tobago at a delicate moment for Caribbean gas balances and regional security. The move injects political risk into a commercial rescue plan that was designed to revive Trinidad’s LNG complex. How quickly diplomacy de-escalates—and whether a conditional path back to cooperation emerges—will determine if this is a brief detour or a structural setback for Dragon gas and Atlantic LNG.