This article examines the recent integration of Latin American and Caribbean (LAC) countries into the BRICS+ framework as part of a broader geopolitical shift toward multipolarity. It analyzes BRICS+ through the lens of New Strategic Regionalism, the author’s own theoretical contribution to the study of regional transformations in the Global South, and focuses on trade deflection under sanctions, and the dynamics of inclusion and exclusion in BRICS+. The study uses a mixed-methods approach. Qualitative analysis of institutional sources is combined with quantitative trade data for Cuba, Bolivia, Nicaragua, and Venezuela. A case study of Venezuela is included, integrating trade microdata—Bill of Lading—to trace emerging supply chains and economic actors, and to examine Venezuela’s exclusion from BRICS+ and its subsequent geopolitical repositioning. Results show that BRICS+ functions as a space of strategic realignment for LAC countries seeking alternatives to Western-dominated trade and financial systems. Cuba and Bolivia were admitted as partners. Although excluded due to Brazil’s objections, Venezuela’s evolving ties with BRICS states reveal informal pathways of integration through South–South cooperation. This article contributes to four key research gaps: LAC in BRICS+; BRICS+ as new strategic regionalism; trade deflection under sanctions; use of trade microdata; and the geopolitics of supply chains. It challenges technocratic approaches by framing these geopolitical dynamics as anchored in contested global power shifts.

trade deflection, geopolitics of supply chains, BRICS+, partner countries in BRICS+, economic sanctions, new strategic regionalism, Venezuela, PDVSA.

This paper examines the differentiated incorporation of the Latin American and Caribbean economies (LAC economies) into the BRICS+ association in the context of contemporary sanctions regimes and the evolving multipolar world order. The existing studies document the rise of BRICS and its implications for global governance. However, comparatively little attention has been paid to how BRICS+ functions as a strategic platform for the differentiated regional integration of LAC economies under sanctions. The present study addresses this gap by analyzing how BRICS-related engagement intersects with sanctions, trade deflection, and supply-chain reconfiguration in four cases: Cuba, Nicaragua, Bolivia, and Venezuela.

The central argument is that the BRICS+ countries should not be seen as a unified bloc, but as an evolving form of strategic regionalism that allows states to pursue selective alignment under geopolitical constraints. Rather than presuming a complete realignment of their markets away from the West, the analysis focuses on gradual, path-dependent adjustments to trade flows, access to markets, and supply-chain governance. These adjustments are shaped by sanctions, institutional alternatives and sectoral structures, particularly in energy and strategic commodities.

Sanctions play a central role in this process. In the past decade, they have become a permanent tool of economic statecraft, reshaping access to markets, financing conditions and participation in global value chains. For the LAC economies, the scope, intensity and jurisdictional reach of sanctions vary widely—from comprehensive embargoes to targeted designation-based measures. These differences generate distinct external environments, within which BRICS-related engagement acquires economic relevance. Accordingly, the paper views sanctions not as external shocks, but rather as institutional mechanisms that shape incentives, constraints and opportunities for reorienting trade and managing supply chains.

Empirically, this study combines comparative international trade data from four cases with evidence from Bills of Lading for Venezuela at the firm and logistics levels, where licensing regimes and corporate filters require analysis beyond aggregated statistics. This mixed approach moves beyond binary notions of access versus exclusion and examines trade deflection as a process shaped by sanctions design, sectoral characteristics and supply-chain configuration.

Historically, the BRIC acronym—Brazil, Russia, India, and China—was introduced in 2001 to describe the growth potential of large emerging economies and institutionalized as BRICS in 2009, with South Africa joining in 2010. By the early 2020s, BRICS accounted for nearly half of the world’s population and over 40 percent of global GDP, while controlling significant shares of hydrocarbons, agricultural commodities, strategic minerals and industrial capacity. This material base underpinned expanded cooperation in finance, energy, and development, particularly in response to financial crises and the growing use of sanctions as instruments of economic policy.

BRICS expansion since 2023 has further altered the geopolitical landscape. Egypt, Ethiopia, Iran, and the United Arab Emirates joined as full members in 2024, followed by Indonesia in 2025. At the same time, a new category of partner countries—often referred to as BRICS++—has emerged, signaling a more flexible and layered approach to cooperation. The Latin American countries Bolivia and Cuba have been incorporated as partners. Other aspirants, such as Venezuela and Nicaragua have remained excluded owing to the internal consensus requirements of the organization. These outcomes underscore that the expansion of BRICS+ is itself a political and institutional process shaped by strategic calculations rather than automatic inclusion.

These dynamics unfold amid intensifying systemic rivalry. The 2025 the U.S. National Security Strategy articulated a renewed hemispheric doctrine linking economic security, energy security, and critical supply chains to the U.S. strategic primacy in the Western Hemisphere. At the same time, China’s 2025 Policy Document on Latin America and the Caribbean advances a vision centered on South–South cooperation, diversified supply chains, and long-term energy and infrastructure partnerships. Together, these competing frameworks help to explain why the BRICS+ countries have become a suitable platform for alternative forms of regional cooperation under sanctions pressure.

The paper poses three questions. First, how do different sanction architectures shape trade deflection outcomes in Latin America? Second, under what conditions does engagement with BRICS-related partners translate into observable trade reorientation rather than institutional or geopolitical alignment alone? Third, how do global value and supply chains operate as geopolitical infrastructures, through which sanctions govern participation rather than simply suppress trade?

By addressing these questions, the study contributes to debates on regionalism, sanctions, and global political economy. It shows that LAC engagement with BRICS+ reflects neither fragmentation nor wholesale realignment, but selective and uneven reconfiguration mediated through trade flows, licensing regimes and supply-chain structures. In doing so, the study advances a process-based understanding of trade deflection and places the BRICS+ countries within a broader framework of strategic regionalism in the context of multipolar transition.

The study of regionalism has long been shaped by Eurocentric theoretical frameworks that conceptualize integration as a linear progression toward supranational governance, grounded in functionalist, neofunctionalist, and liberal economic traditions (Deutsch, 1957; Haas, 1958; Balassa, 1961). These approaches elevated the European Union to a normative standard and promoted a teleological approach to regional integration, centered on trade liberalization, institutional harmonization, and market expansion. Within this tradition, regionalism is typically evaluated by its capacity to approximate advanced capitalist integration models.

In Latin America and the Caribbean (LAC), however, early critiques emerged from Dependency Theory, which emphasized structural asymmetries, unequal exchange, and the limits of integration projects embedded in externally oriented development paths. Scholars such as Raúl Prebisch, Clive Thomas, Havelock Brewster, and Norman Girvan challenged the orthodox trade theory by foregrounding the hierarchical organization of global production, finance, and markets. Their work underscores the fact that regional integration initiatives can reproduce dependency if they fail to address power imbalances, productive specialization and restricted access to critical resources and technologies.

By the 1990s, the New Regionalism literature broadened the analytical scope of integration by incorporating political, social, and institutional dimensions beyond trade liberalization. Yet, despite this multidimensional turn, much of the literature retained Eurocentric assumptions regarding institutional form, sequencing, and developmental outcomes. This limitation prompted calls for approaches rooted in the historical experiences and structural conditions of the Global South (Blaut, 2000; Söderbaum & De Lombaerde, 2013). These critiques opened space for Southern-centered frameworks that are particularly relevant for understanding contemporary configurations such as BRICS and its expanding orbit.

Among these approaches, New Strategic Regionalism (NSR) conceptualizes regionalism as a complex and multi-layered process through which states and firms renegotiate access to markets, finance, technology, infrastructure and logistics in conditions of geopolitical constraints (Aponte-Garcia, 2014, 2025). Developed through empirical engagement with initiatives such as the Bolivarian Alliance (ALBA-TCP), NSR departs from linear models of integration and emphasizes energy sovereignty, endogenous development, and South–South cooperation as strategic responses to structural exclusion from Western-dominated regimes. From this perspective, regionalism is not defined by formal membership alone, but by functional alignment across specific sectors and institutional channels.

The scholarship on South–South cooperation traces institutional experimentation from Bandung to contemporary arrangements and highlights cooperative mechanisms aimed at reducing dependency on governance structures dominated by the Global North (Ojeda Medina & Echart Muñoz, 2019). Decolonial perspectives further extend this critique by reframing integration as an epistemic and political struggle linked to cognitive sovereignty, colonial legacies, and contested development models (Quijano, 2000; Maldonado-Torres, 2008; Dussel, 2016; Mignolo & Walsh, 2018). Recent studies draw on these traditions to analyze BRICS as a heterogeneous and evolving space of institutional innovation, geoeconomic negotiation, and differentiated insertion within the Global South rather than as a cohesive alternative bloc (Muhr, 2023; Al-Kassimi, 2018; Li, 2019; Amineh et al., 2025; Aponte-Garcia, 2025).

In parallel with debates on regionalism, an increasing body of literature examines the geopolitical aspects of trade under sanctions. International economics defines trade deflection as the redirection of exports to alternative destinations when access to traditional markets is restricted. Foundational work by Bown and Crowley (2007) established the analytical basis for identifying deflection effects, while subsequent empirical research employed dynamic trade models, customs data and firm-level approaches to assess how sanctions reshape commercial flows (Haidar, 2017; Mattoo & Staiger, 2020). This literature demonstrates that deflection is mediated by firm characteristics, sectoral structures, pricing strategies, and trade histories rather than occurring as an automatic shift from sanctioned to non-sanctioned markets. More recent contributions emphasize indirect and third-country effects, highlighting the complexity of sanction-induced trade reconfiguration within global markets (Escaith, 2021). Complementary research shows how economies sanctioned by the West deploy alternative mechanisms to maintain trade, including new maritime routes, bilateral agreements, barter arrangements and non-Western financial channels (Aponte-Garcia, 2024).

Much of this work remains focused on aggregate trade outcomes and tends to under-theorize the institutional, logistical, and regulatory mechanisms through which sanctions operate in practice. This limitation is addressed by critical scholarship on global value and supply chains, which increasingly conceptualizes supply chains as geopolitical infrastructures rather than purely technocratic or efficiency-driven systems. Approaches such as logistical mapping, choke-point analysis and value-chain tracing reveal how power, exclusion, and sovereignty are exercised through control over transport nodes, processing facilities, ownership structures and regulatory regimes (Le Billon, 2004, 2014; Bruckmann, 2012; Ceceña, 2023; Aponte-Garcia, 2018, 2024). These perspectives contrast with technocratic risk-management approaches that treat disruptions as operational challenges rather than as manifestations of geopolitical conflict and strategic contestation (Notteboom et al., 2022; Bednarski et al., 2025).

Despite these advances, several gaps remain. Empirical analysis of Latin American engagement with BRICS-related partners is limited; sanction-induced trade deflection in the region remains underexplored; Bills of Lading microdata are rarely incorporated into geopolitical analysis; and the role of sanctions, which failed to completely eliminate trade but contributed to the restructuring of supply chains, requires thorough theoretical research.

The present paper addresses these gaps by examining how different sanctions designs determine trade deflection, BRICS-related engagement and supply-chain restructuring across four Latin American economies. By integrating comparative trade analysis with micro-logistics evidence in the Venezuelan case, the paper advances an analytical framework that treats sanctions, trade deflection, and supply chains as interlinked mechanisms of contemporary geoeconomic governance, consistent with a strategic regionalism perspective in conditions of multipolar transition.

The New Strategic Regionalism (NSR), introduced by Aponte-Garcia (2014), provides the theoretical foundation for this study. NSR synthesizes contributions from international trade theory, endogenous development theory, multidimensional regionalism and sovereignty-centered approaches, offering an alternative to linear, market-driven integration characteristic of open regionalism. Unlike conventional models that assume predictable trade patterns and automatic convergence, NSR emphasizes structural asymmetries, strategic state intervention, and political economy dynamics as determinants of regional trajectories.

The intellectual roots of NSR draw on developments in international trade theory, particularly new international trade theory and its later extension into new-new trade theory (NNT). New international trade theory departed from the Heckscher–Ohlin framework by incorporating economies of scale, imperfect competition, and historically shaped growth paths (Helpman & Krugman, 1985). Subsequent incorporation of heterogeneous firms further demonstrated that trade patterns are not predetermined by factor endowments alone but are shaped by firm-level capabilities, institutional contexts, and historical contingencies (Bernard et al., 2007; Mikic, 1998). These insights undermine deterministic assumptions of outward-oriented integration and legitimize the role of industrial policy, export incentives, investment strategies and research and development as tools for securing competitive advantage under asymmetric global conditions (Aponte-Garcia, 2014).

NSR builds on these theoretical advances by explicitly integrating political economy considerations into the analysis of regionalism. It treats trade outcomes as contingent on institutional design, state capacity, regulatory frameworks and geopolitical positioning, rather than as automatic responses to market signals. From this perspective, regional integration is not reducible to tariff cuts or market opening but involves strategic coordination across various sectors, including finance, energy, infrastructure, and technology. This multidimensional approach is particularly relevant for regions and economies operating under conditions of restricted market access, external vulnerability, or sanctions pressure.

In Latin America and the Caribbean (LAC), strategic regionalism has been applied to a range of integration experiences. Briceño Ruiz (2006) interprets initiatives such as Mercosur and the proposed Free Trade Area of the Americas as expressions of strategic regionalism shaped by alliances between states and transnational corporations, a pattern also observed in advanced economies since the 1980s. Comparable analyses in Asia and Africa examine how regionalism intersects with foreign policy agendas, development finance, and state-led coordination mechanisms (Gilson, 2007; Qobo & Motsamai, 2014). These studies underscore that regionalism frequently reflects strategic responses to external constraints rather than purely economic optimization.

Aponte-Garcia (2014) further advances NSR by conceptualizing it as a form of post-hegemonic and alternative regionalism that emerged in LAC through initiatives such as the Bolivarian Alliance for the Peoples of Our America (ALBA-TCP). In this formulation, NSR is characterized by the centrality of the state as a strategic actor; the creation of state-led or hybrid regional enterprises; the integration of economic, political, and social objectives; and sovereignty-oriented policies shaping trade, investment, and production. Empirical applications of NSR demonstrate how alternative integration models can emerge from the Global South through innovations in regional finance, energy cooperation and food systems.

This theoretical framework is particularly relevant for analyzing the BRICS association and its expanding orbit. Existing scholarship highlights that BRICS cooperation seeks to enhance the structural position of its members within the global economy by leveraging collective capabilities and promoting institutional alternatives to Western-dominated financial and commercial systems (Lissovolik, 2018; Revenko & Revenko, 2019; Iqbal, 2022). From an NSR perspective, BRICS and BRICS-related arrangements can be understood not as a unified bloc or a substitute for existing markets, but as an evolving geoeconomic configuration through which states pursue selective functional alignment, strengthen endogenous capacities and coordinate their strategic responses to geopolitical and economic constraints.

Applied to the Latin American context, NSR provides a conceptual lens for examining how engagement with BRICS-related partners intersects with sanctions, trade deflection and supply-chain restructuring. Rather than presuming convergence toward a single integration outcome, the framework allows analysis of differentiated and path-dependent forms of insertion shaped by sanctions design, sectoral structures and institutional alternatives. This theoretical grounding underpins the empirical analysis presented below, which examines how sanctions lead to trade reorientation and influence supply-chain governance within the broader context of BRICS-related strategic regionalism.

The research uses exploratory and mixed-methods, combining qualitative interpretation with quantitative analysis to examine how sanctions reshape trade reorientation and supply-chain structures. The study is organized around two interconnected analytical components related to Latin American economies within the geopolitical orbit of BRICS.

The first component establishes the core analytical proposition: sanctions imposed by Western powers generate differentiated patterns of trade deflection toward BRICS-related partners. Sanctions are implemented as import bans, financial restrictions, and compliance constraints that affect exports. Trade deflection is understood as the relative reorientation of export flows towards China, India, and other BRICS economies. The analysis focuses on BRICS rather than BRICS+ because the latter was institutionalized only in 2025 and sufficient trade data are not yet available.

Sanctioning jurisdictions include the United States, the European Union, and allied states, contrasted with BRICS economies as non-sanctioned destinations. The empirical context is shaped by a highly uneven sanctions landscape: Venezuela and Cuba emerge as the most intensely sanctioned economies in Latin America, Nicaragua as an emergent sanctioned case, and Bolivia as a politically disrupted but non-embargoed exporter. This variation enables comparative assessment of how sanctions design, scope and timing determine trade responses.

The second component applies a structural value-chain and supply-chain method to petroleum trade in Venezuela, integrating international trade statistics with Bills of Lading microdata. This component helps quantify trade deflection by tracing petroleum flows from extraction to commercialization under sanctions and licensing regimes.

To distinguish trade deflection from normal volatility, the study applies explicit operational criteria. Trade deflection is defined as a politically induced reorientation of exports occurring under sanctions, while normal volatility refers to short-term fluctuations driven by price cycles, domestic production changes or exogenous shocks such as COVID-19. Empirically, a shift is classified as trade deflection when at least two of the following conditions are jointly observed: (1) contraction toward sanctioning jurisdictions, (2) asymmetric reorientation toward BRICS-related partners and (3) temporal alignment with sanctioning or geopolitical shocks beyond normal volatility. These criteria are applied consistently while allowing for case-specific sanction configurations.

This study adopts an exploratory mixed-methods research design that combines comparative international trade statistics with shipment-level logistics data to analyze sanction-driven trade reorientation and supply-chain restructuring. The methodological focus is structural: it examines how sanctions govern access, routing and participation within global value and supply chains, rather than treating trade outcomes as purely market-driven responses.

The empirical analysis integrates international trade data from UN Comtrade, complemented by UNCTAD mirror statistics where reporting gaps exist for sanctioned economies, with Bills of Lading microdata obtained from ImportKey. Trade flows are identified using Harmonized System (HS) product classifications and grouped by economic use using the United Nations Broad Economic Categories (BEC), allowing consistent comparison across countries and over time. Shipment-level data provide information on routing, ports, buyers and exporters, enabling linkage between aggregate trade reorientation and firm-level logistics under sanctions.

The analytical strategy follows a fixed and sequential protocol applied consistently across cases. Aggregate trade patterns are examined first, followed by joint analysis with shipment-level data where applicable. For Venezuela, this approach is extended through a dedicated Bills of Lading subsample to capture licensed trade under multi-jurisdictional sanctions and to assess how sanctions restructure participation within supply chains through compliance, buyer concentration, and refinery compatibility.

A complete and replicable description of data sources, classification frameworks, database construction, sequential analytical steps and filtering criteria is provided in Supplementary Material S1. That supplement contains a full methodological protocol for replication and assessment of robustness.

The emergence of financial, energy, and food-related initiatives within BRICS provides concrete evidence of New Strategic Regionalism (NSR). These interconnected domains illustrate how selective functional coordination reshapes regional and global governance in conditions of sanctions and systemic rivalry.

The BRICS group has consolidated its position in the global political economy as a center of influence and an example of dynamic regionalism (Lagutina, 2019, 2022). It has contributed to debates on reforming international financial systems through new institutional instruments (Iqbal, 2022) and coordinated responses to sanctions and external shocks. On the productive side, integration advances through national development strategies (Gedikli et al., 2025), trade diversification toward Asian markets under geopolitical constraint and reinforcement of state-owned enterprises (Revenko & Revenko, 2019; Aponte-Garcia, 2024). Together, these dynamics support an interpretation of BRICS as a space for political, social, and economic articulation rather than a narrowly defined trade bloc.

The expansion of BRICS+ represents a new form of strategic regionalism that is less about institutional replacement and more about selective coordination in critical areas. Rather than constituting a consolidated alternative economic order, BRICS+ operates as a layered platform through which member and partner countries experiment with mechanisms that expand policy space under sanctions, financial constraint and geopolitical fragmentation. Finance, energy, and food systems constitute the primary arenas where this applied regionalism becomes observable.

In the financial domain, BRICS initiatives respond directly to the growing use of global financial infrastructure as an instrument of geopolitical pressure. Member countries have prioritized reducing their exposure to transaction blocking through the Society for Worldwide Interbank Financial Telecommunication (SWIFT), especially in sanctioned situations. Initiatives such as BRICS Pay and the BRICS Bridge proposal exemplify this approach. Neither aims to replace national payment systems, including China’s Cross-Border Interbank Payment System (CIPS) or Russia’s System for Transfer of Financial Messages (SPFS). Instead, they seek to enhance interoperability among national infrastructures, facilitate settlement in local currencies and sustain intra-BRICS transactions under constrained conditions. Proposals involving blockchain technology or central bank digital currencies—such as the digital yuan (e-CNY) and the digital ruble—remain at pilot or conceptual stages (Krause, 2024; Batista Jr., 2024), underscoring the incremental nature of financial reconfiguration.

Complementing these mechanisms, the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA) provide institutional anchors for functional integration. By 2023, the NDB had approved more than USD 30 billion in infrastructure and sustainable development financing across the Global South, while operating within global capital-market constraints (Iqbal, 2022). The CRA, with committed capital of USD 100 billion, offers emergency liquidity through currency swaps, allowing members to manage balance-of-payments stress without immediate recourse to the International Monetary Fund (IMF). Together, these instruments expand financial policy space while remaining embedded in existing global structures, consistent with the layered and non-substitutive logic of NSR.

Energy constitutes a second domain where applied strategic regionalism is evident. BRICS+ expansion has strengthened coordination across production, pricing, and infrastructure, particularly under sanctions and financial restrictions. The launch of yuan-denominated crude oil futures on the Shanghai International Energy Exchange in 2018 marked a step toward diversified pricing mechanisms. Several BRICS and partner countries, including Russia and Iran, have expressed interest in these instruments that could reduce reliance on dollar-based settlements. In parallel, the NDB has expanded financing for energy infrastructure, including renewable energy, electrification and efficiency projects. These initiatives reflect efforts to reconfigure energy trade and finance through functional coordination rather than market replacement.

Food systems represent a third area of strategic experimentation. BRICS+ initiatives in food security seek to reduce exposure to dollar-based commodity markets, speculative trading, and concentrated supply chains. The proposed BRICS Grain Exchange, endorsed in the 2024 Kazan Declaration, aims to facilitate intra-BRICS grain trade, potentially enabling settlement in national currencies. Although projected volumes are significant, operational features remain underdeveloped. Alongside this proposal, BRICS agricultural cooperation platforms link ministries and research institutions helping to coordinate technology, standards and food security. During recent disruptions, such as the COVID-19 pandemic and the war in Ukraine, the BRICS members explored alternative trade routes, payment mechanisms and fertilizer exports, illustrating crisis-driven coordination rather than institutional integration (Gedikli et al., 2025).

Taken together, these developments provide evidence of BRICS+ as a form of strategic regionalism characterized by selective alignment, institutional layering and experimental governance. Financial, energy, and food initiatives do not constitute a unified alternative system, nor do they replace existing global structures. Instead, they operate as interconnected mechanisms that expand strategic autonomy under sanctions and geopolitical pressure. This pattern reinforces the interpretation of BRICS+ as an evolving platform for South–South coordination, where regionalism unfolds through infrastructure, market access and governance experimentation rather than bloc substitution.

As stated in the Methods section, results are presented in three components for each country. First, sanctions design and jurisdictional scope are reported as the geopolitical conditions structuring expected trade responses. Second, trade-deflection outcomes are examined using the operational criteria defined in the Research Design. Micro-logistics evidence from Bills of Lading (BoL) data is incorporated only for the Venezuela case study, where licensing regimes, firm-level access, and routing decisions require analysis beyond aggregate trade statistics. Third, BRICS-related cooperation is reported using selected secondary evidence to document sectoral, infrastructural, and institutional linkages relevant to trade and supply-chain reconfiguration, subject to space constraints.

Venezuela constitutes the most analytically complex case in the sample due to the scope, sequencing, and sectoral targeting of sanctions led primarily by the United States, with spillovers affecting European and UK-based actors. Unlike cases of comprehensive embargo or targeted designation, Venezuela is subject to a layered sanctions architecture combining financial restrictions, asset controls, sectoral measures, and selective licensing. Results therefore integrate aggregate trade statistics, product-level disaggregation, and micro-logistics evidence from Bills of Lading (BoL) data to assess how trade deflection unfolds under multi-jurisdictional sanctions.

Sanctions Design and Jurisdictional Scope

Since 2015, Venezuela has been subject to an escalating sanctions regime combining financial, sectoral and asset-control measures. Executive Order 13692 (March 2015) declared a national emergency and initiated targeted asset freezes. These measures expanded substantially after 2017 through restrictions on PDVSA’s access to U.S. financial markets, prohibitions on new debt issuance and limitations on commercial operations.

In January 2019, sanctions intensified with the freezing of PDVSA’s U.S.-based assets, including the transfer of operational control over CITGO Petroleum Corporation to an opposition-appointed board. This action disrupted Venezuela’s access to U.S. refining capacity, payment channels, and trade financing. Subsequent measures extended sanctions to the Central Bank of Venezuela and redefined the “Government of Venezuela” to include entities acting on its behalf, further tightening compliance constraints.

While the United States functions as the principal sanctioning jurisdiction, European and UK-based actors are affected through secondary compliance obligations. At the same time, sanctions design does not impose an absolute prohibition on crude oil trade: selective licenses issued by the Office of Foreign Assets Control (OFAC), notably for Chevron, Repsol, and Eni, permit regulated transactions under defined conditions. This differentiated architecture is central to understanding subsequent trade patterns.

Trade Patterns under the Trade-Deflection Criteria

Condition 1: Persistent Decline of Exports toward the Sanctioning Jurisdiction

Result: Structural displacement of the U.S. market (2019–2022)

Figure 4 presents aggregate Venezuelan exports to the United States, the European Union and BRICS-related partners between 2016 and 2024. The figure shows that exports to the United States, which remained substantial and stable through 2017, collapsed after 2018 and fell to marginal or near-zero levels during 2019–2021. This contraction coincided temporally with asset freezes, loss of access to U.S. refineries and financial restrictions affecting PDVSA and its subsidiaries.

Figure 4. 

Venezuela’s Exports to BRICS, the EU, and the U.S. (2016–2024). All products, in US$ at current prices. Source: Author’s elaboration based on UN Comtrade data.

The persistence of negligible U.S.-bound exports through 2022 indicates that the decline exceeds short-term volatility and reflects structural displacement rather than cyclical adjustment. Although limited European engagement persists under specific licenses, the United States, historically Venezuela’s primary crude export destination, is effectively removed from the export geography during this period.

Condition 2: Asymmetric Reorientation toward Non-Sanctioning or BRICS-Related Partners

Figure 4 also shows that, following the contraction of U.S.-bound exports, BRICS-related destinations, particularly China and India, absorbed a rising share of Venezuelan exports during 2019–2021. This pattern satisfies the criterion of asymmetric reorientation: BRICS-related partners gain relative weight as sanctioning markets contract.

However, this reorientation is not expansionary. Absolute export values declined sharply after 2018 across all destinations. Figure 5, which isolates oil exports (HS 2709), confirms that while China and India dominate Venezuelan oil exports during the sanctions period, total export volumes remained significantly below pre-2018 levels. BRICS-related partners increased in relative importance but did not replace Western markets in volume terms.

Figure 5. 

Venezuela’s Oil Exports to BRICS, the EU, and the U.S. (2016–2024). All products, in US$ at current prices Harmonized Schedule Tariff Code 2709. Source: Author’s elaboration based on data from UN Comtrade and UNCTAD. Notes: 1. For 2023, the values for China and India were estimated using UNCTAD data. That value was multiplied by 0.83, which is the percentage of Venezuela’s oil exports; then multiplied by 1 million because UNCTAD expresses values in millions. 2. For 2020, China does not report data to UN Comtrade.

This asymmetric pattern reflects operational deterioration at PDVSA, shortages of diluents, labor losses, and constraints in shipping, insurance, and financing. Trade deflection is thus manifested as relative dominance rather than absolute substitution.

Condition 3: Temporal Alignment beyond Normal Volatility

The collapse of U.S.-bound exports after 2018 aligns closely with sanctions escalation and asset seizures, exceeding normal trade volatility. By contrast, the generalized contraction across destinations during 2020–2021 coincided with the COVID-19 pandemic, which disrupted refinery demand, maritime logistics, and insurance markets globally.

From 2023 onward, aggregate exports stabilize as global trade conditions improve. During this phase, limited U.S. imports reappear following OFAC General License 41, as reflected in Figure 4. This inflection is regulatory rather than market-driven, indicating conditional re-entry governed by licensing regimes rather than a reversal of sanctions.

Table 1 extends the analysis beyond crude oil by mapping PDVSA’s exports across Harmonized System (HS) and Broad Economic Categories (BEC) classifications in 2024.

Table 1.

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Venezuela’s Exports by Harmonized System (HS) Category and Destination, 2012 and 2024. US$ at current prices; sorted in descending order of export value in 2024

Goods Category	HS Code	Destination	Exports 2012 (US$)	Exports 2024 (US$)
Primary goods	HS 27 – Crude oil	USA	38,005,859,039	6,009,354,781
		BRICS	26,557,280,499	3,033,224,127
		EU	4,620,620,428	1,661,622,709
Industrial goods	HS 29 – Chemicals	BRICS	90,600,875	215,343,758
		EU	272,232,387	163,499,994
		USA	382,587,747	53,891,309
	HS 31 – Fertilizers	BRICS	42,492,654	184,638,464
		EU	1,453,485	1,658,538
		USA	107,586,136	0
	HS 39 – Plastics	USA	3,153,323	2,654,687
		BRICS	2,919,907	1,834,502
		EU	759,318	102,379
	HS 40 – Rubber	BRICS	5,153,536	200,482
		EU	308,495	76,408
		USA	820,484	11,978

Source: Author’s elaboration based on UN Comtrade data. Notes: 1. Values are expressed in current US dollars. 2. BRICS includes China and India for the period analyzed. 3. The table is ordered by export value in 2024 to highlight post-sanctions restructuring.

The United States concentrates imports in primary goods (HS 27), while BRICS destinations dominate industrial categories, including chemicals (HS 29), fertilizers (HS 31) and rubber (HS 40), and the European Union remains a secondary outlet. This configuration indicates that sanctions and energy-market shifts have reshaped Venezuelan supply chains across product groups, not only across destinations.

Micro-Logistics Evidence: Bills of Lading Subsample

To complement aggregate trade statistics, BoL data capture shipment-level outcomes under licensing regimes. The subsample includes 231 PDVSA–PetroPiar shipments to the United States during 2023–2025, compared with the pre-sanctions period (2016–2019).

BoL – Condition 1: Volume contraction with continued physical anchoring

Shipment frequency and buyer diversity decline sharply after sanctions. Nevertheless, Venezuelan crude continues to enter the United States through a limited number of refinery hubs. Five ports—Pascagoula, New Orleans, Wilmington, Freeport, and Port Arthur—account for approximately 85% of arrivals, indicating contraction without full logistical exit.

BoL – Condition 2: Intra-market deflection via buyer concentration

Before 2019, approximately 260 buyers participated in Venezuelan crude imports. In 2023–2025, only 27 buyers remained active, with more than 80% of shipment volume concentrated among Chevron-related entities and Repsol affiliates. Only four buyers persisted across both periods, all within the Chevron corporate group.

BoL – Condition 3: Structural break between diversified and licensed regimes

The transition from a diversified buyer structure (2016–2019) to a highly concentrated, license-dependent configuration (2023–2025) aligns with the 2019 asset freezes, loss of general market access for U.S. refiners, and the introduction of selective licensing regimes culminating in General License 41. The permanence of buyer exit across periods indicates structural filtering rather than temporary pandemic disruption.

Shipments are dominated by Boscan, Merey 16, and Special Hamaca Blend crudes, which are technically compatible with U.S. refineries configured for heavy and extra-heavy oil. This compatibility explains the persistence of downstream integration under licensing regimes and reinforces the interpretation of sanctions as mechanisms regulating participation within supply chains rather than dismantling them.

BRICS-Related Cooperation

Beyond observable trade flows, Venezuela maintains sustained cooperation with BRICS-related partners across energy, finance, and infrastructure. China consolidates its role as the principal crude destination during the sanctions period, supported by long-term supply arrangements, pre-financing mechanisms and logistical adaptations. India remains an important secondary outlet, particularly during periods of heightened U.S. restrictions.

Russian engagement extends beyond trade volumes to upstream investment, financing and technological cooperation. Rosneft provided multi-billion-dollar financing advances prior to 2019 and participated in joint ventures supporting PDVSA’s operational continuity. Although some positions were later adjusted due to secondary-sanctions exposure, institutional ties in energy, logistics and applied technology persist.

At the financial level, Venezuela increasingly relies on non-Western mechanisms, including bilateral clearing arrangements, oil-backed financing and alternative payment channels. These forms of cooperation do not necessarily register as immediate trade expansion but shape the institutional environment within which trade deflection and partial recovery occur.

This paper posed three questions about how sanctions architectures shape trade deflection, when BRICS-related engagement becomes economically consequential, and how value and supply chains transmit power. The cases show that the key explanatory leverage lies less in “sanctions” as a generic condition than in the institutional design through which sanctions reorganize market access, financing and logistics.

First, sanctions architectures shape trade deflection through their scope and regulatory form. Comprehensive embargo-like regimes tend to lock in exclusion and convert destination choice into a structural constraint, whereas targeted, designation-based measures primarily raise compliance costs and uncertainty while leaving core trade corridors intact. Between these poles, sectoral sanctions paired with licensing regimes create hybrid outcomes: they can induce reorientation while also allowing selective continuity and partial re-entry. The implication is that sanction architecture—not only sanction severity—structures the feasible set of trading options and the time path of adjustment.

Second, BRICS-related engagement translates into observable trade reorientation under specific scope conditions: when Western access is materially constrained (by prohibition, finance, or compliance risk), when BRICS partners provide usable functional alternatives (settlement channels, buyers, logistics, or financing), and when sectoral characteristics make redirection operationally viable. Where these conditions do not coincide, BRICS engagement may still matter, but mainly as institutional hedging, diplomatic positioning, or long-horizon capacity building rather than immediate trade redirection. This reframes BRICS-related ties as a menu of functional linkages whose economic effects depend on constraint intensity and sectoral fit.

Third, the evidence supports treating global value and supply chains as the institutional “surface” on which sanctions work. Sanctions do not only block flows; they determine which actors can transact, which nodes remain accessible, and which forms of intermediation become decisive. Under such conditions, deflection is better understood as a reallocation of connectivity—across buyers, routes, and compliant intermediaries—than as a simple destination swap. This explains why comparable geopolitical pressure can yield sharply different trade responses across cases with different chain structures and compliance environments.

Taken together, the discussion answers the three questions by locating trade deflection at the intersection of sanction architecture, functional alternatives, and chain governance. These mechanisms motivate the theoretical implications developed further.

This paper contributes to three interrelated strands of scholarship: theories of regionalism and South–South cooperation, the literature on sanctions and trade deflection, and the emerging field of the geopolitics of trade and supply chains. By situating four Latin American economies within the context of BRICS+ expansion and contemporary sanctions regimes, the analysis refines existing theoretical frameworks rather than merely extending them to new empirical cases.

First, the findings advance New Strategic Regionalism (NSR) as a framework for interpreting BRICS+ and Latin America’s differentiated insertion into an emergent multipolar order. NSR conceptualizes regionalism not as a linear process of trade liberalization, but as a contested, multi-layered configuration through which states and firms renegotiate access to finance, technology, infrastructure and markets in conditions of geopolitical constraint. The contrasted trajectories of Cuba, Nicaragua, Bolivia, and Venezuela show that BRICS+ function less as a unified bloc than as a layered regional mechanism enabling diverse forms of insertion. Formal membership, long-term South–South reorientation, infrastructural and diplomatic realignment, and functionally mediated integration under institutional exclusion coexist within the same regional project. This evidence supports treating regionalism as a spectrum of institutional and functional positions rather than a binary distinction between members and non-members.

Second, the article advances the theory of trade deflection under sanctions by moving beyond static definitions that treat deflection as a discrete redirection of exports from sanctioning to non-sanctioning markets. The comparative evidence shows that under prolonged and heterogeneous sanctions regimes, trade deflection is a process shaped by sanctions design, legal scope, and institutional mediation, rather than a uniform market response. The four cases illustrate a structured spectrum of outcomes consistent with the Discussion section: structurally consolidated trade deflection under comprehensive sanctions (Cuba); geopolitical realignment without aggregate trade deflection under designation-based sanctions (Nicaragua); contingent and resource-driven trade deflection under political rupture and strategic competition (Bolivia); and sanctions-induced trade deflection combined with conditional and regulated market re-entry under licensing regimes (Venezuela). This formulation shifts analytical attention away from before–after comparisons of trade volumes toward the temporal sequencing of sanctions instruments, market access constraints, and adaptive trade and supply-chain responses, clarifying how deflection may be consolidated, delayed, partial, or reversible depending on sanctions architecture.

Third, the integration of HS and BEC trade data with Bills of Lading micro-evidence contributes to supply-chain scholarship by conceptualizing sanctions as a structuring force of chain geography rather than as an external shock. While the comparative analysis relies on aggregate trade data to identify patterns of reorientation across cases, the Venezuela-specific micro-evidence demonstrates how ownership structures, logistics nodes, and licensing arrangements determine which trade flows are permitted, rerouted, or restricted. This approach underscores that global value and supply chains operate as geopolitical infrastructures, in which power relations materialize through ports, refineries, corporate entities and regulatory exemptions. These findings challenge the presumably objective views of trade and technocratic notions of supply-chain resilience, highlighting instead the political contestation embedded in chain governance.

Taken together, these contributions also engage decolonial and dependency-informed perspectives by showing how sanctions reproduce hierarchies in access to finance, technology and markets, while simultaneously generating incentives for Southern actors to pursue alternative forms of regional and interregional coordination. The concept of a geopolitics of trade and chains synthesizes this insight by treating sanctions, trade deflection, and selective functional alignment as central mechanisms through which contemporary struggles over sovereignty and development unfold in the Global South.

This study shows that Latin American engagement with BRICS-related channels under sanctions is best explained as differentiated adjustment within constrained trading systems, not as a single trajectory of bloc substitution. Across cases, sanction architecture shapes the space of feasible trade responses; BRICS-related ties become economically consequential when they offer operational alternatives under binding constraints and supply-chain connectivity mediates how restrictions translate into observed outcomes.

For policy and research, the key agenda is to identify which functional channels — settlement, logistics, financing and compliant intermediation — convert geopolitical alignment into durable economic options, and under what sectoral and institutional conditions those channels can be scaled. Future work can test these mechanisms across additional sectors and with expanded micro-logistics data to assess generalizability beyond energy-centered chains.

Understanding these processes requires shifting analytical attention away from blocs and agreements toward the infrastructures through which power is exercised. This paper contributes to BRICS scholarship by shifting analysis from bloc-level integration to supply-chain–mediated geopolitical insertion. By foregrounding the geopolitics of trade and chains, the study offers a framework for interpreting how sovereignty, development strategies and multipolarity are shaped.