The authorities in Port of Spain have tried to downplay the public impact, but sources in the private sector and energy analysts indicate that, without access to volumes from Dragon or quick contractual adjustments, the island will face a fiscal and labor adjustment in the energy sector.
The decision announced on October 27, 2025, by Nicolás Maduro to suspend all energy agreements with Trinidad and Tobago—including the significant gas project at the Dragon field—not only signifies a break in bilateral cooperation, but also a board of losses and gains where both countries bear distinct risks. Port of Spain is exposed to an immediate economic shock by losing access to key gas for its liquefaction industry; Caracas sacrifices a gateway to monetize reserves amid sanctions, while London and Washington watch the movement from the geopolitical sidelines.
The rupture has been triggered by the Venezuelan perception of “hostile actions” from Trinidad and Tobago. Caracas considered that the energy strategy of its neighbor—combined with the arrival of a U.S. warship—threatened its sovereignty.
Shell plc, along with the National Gas Company of Trinidad and Tobago (NGC), received a U.S. license to develop gas in Venezuelan waters, which would generate revenue for Venezuela. However, the presence of U.S. military vessels and aircraft carriers in Trinidad and Tobago for military exercises led to the Venezuelan regime’s decision to suspend all energy cooperation for the shared gas development with the Caribbean island, alleging that the Trinidadian government aligned with Washington in what Maduro called an attack against Venezuelan territory.
The Dragon field—estimated to hold around 4 trillion cubic feet of recoverable gas—represented a pathway for Trinidad to stabilize its declining production. Maduro declared an “immediate” suspension and ordered Congress and the Supreme Court to review the effects of the agreement.
Who Wins and Who Loses?
Trinidad and Tobago
T&T faces a direct blow to its economic structure following the suspension of the energy agreement with Venezuela. Its export model critically depends on liquefied natural gas (LNG) processed in complexes like Atlantic LNG, which relies on a stable supply of raw material.
The interruption of the flow from the Venezuelan Dragon field threatens to leave part of this strategic infrastructure idle, forcing the country to resort to imports of gas or LNG at higher international prices, which would raise public spending and reduce the competitiveness of its petrochemical industry. In the medium term, the inability to develop Dragon not only limits the country’s energy potential but also undermines fiscal projections and compromises the sustainability of one of Trinidad’s economic pillars.
The losses for Venezuela
Although gas is not the main source of revenue for Venezuela, as the sector operates under strict international sanctions, the suspension of the agreement with Trinidad and Tobago eliminates a strategic avenue for earning foreign currency and diversifying the economy beyond oil. The blockage of the Dragon project and the halt of associated agreements puts PDVSA at significant challenges to attract foreign investment and advance essential offshore developments for the country’s energy future. Geopolitically, the breakdown of this regional alliance heightens Venezuela’s energy isolation, leaving the country more exposed to additional sanctions and weakening its influence in the Caribbean region.
Who Wins and Why?
The Maduro government gains in “sovereign narrative.”
From the regime’s perspective, the measure reinforces the idea of defending sovereignty against what is described as direct U.S. military intervention in the Caribbean. This symbolic victory can resonate, according to AP, in internal legitimization.
External actors
Major oil companies (like Shell) and new investors may renegotiate contractual terms with Trinidad and/or Venezuela. The instability creates opportunities to acquire assets or arrive with better leverage in negotiations.
The U.S. government and its allies gain greater indirect influence: by sanctioning or conditioning negotiations for gas with Venezuela, they strengthen their role as arbiters of the region. The license granted to Trinidad in October 2025 is indicative.
Secondary Effects
The Manatee field (independent development in Trinidad but with a shared portion with Venezuela) becomes vulnerable: although not yet formally suspended, the bilateral rupture raises contractual uncertainties.
Caribbean energy integration loses a key link; the interruption forces Trinidad to diversify rapidly, which may lead to greater emissions, increased costs, and disrupt regional value chains.
A military or diplomatic escalation poses a risk: the presence of U.S. warships and the belligerent tone of the Venezuelan announcement amplify the danger of the conflict transcending the commercial realm.
Mediation and Partial Reactivation:
The most viable path is for regional organizations (like CARICOM) or third parties (U.S., UN) to mediate to reestablish at least partial supply. This would help limit losses.
Prolonged Suspension:
If the discord persists for months or years, Trinidad will suffer production losses and Venezuela will increase its energy isolation. Companies could activate arbitration clauses and face costly litigation.
Geopolitical Escalation:
In the worst-case scenario, a military clash or additional sanctions trigger a greater crisis in the region, with impacts on energy, migration, and security.
The rupture of the gas agreement between Venezuela and Trinidad and Tobago may seem like a technical-energy issue. However, it is actually a microcosm of the new geopolitical order in the Caribbean: winners and losers are not just playing for millions of cubic feet of gas, but for sovereignty, alliances, and regional power.
Trinidad risks its export model and energy sustainability; Venezuela sacrifices a strategic capital influx and strengthens its isolation. Meanwhile, global and corporate actors await their moves. In a world where gas is transported through pipelines, it also moves through diplomatic and military corridors. In this game, no one can afford to be left without pieces.