United States Hegemony Under Strain - The Triangular Effect Of The Need For Venezuela’S Oil, Chinese Finance Leverage, And The Ongoing Energy/Debt Crisis
John Okey Onoh (Ph.D)
Department of Banking and Finance, Abia State, University Ututu, Nigeria
Mbanasor Christian (Ph.D)
Department of Banking and Finance, Imo State Polytechnique, Omuma, Imo State, Nigeria
Keywords: United States hegemony, Venezuelan oil, Chinese finance, energy crisis, debt crisis, triangular effect, mixed methods, Likert scale, sanctions, fiscal accommodation, perceived decline
Abstract
The United States’ post‑World‑War II hegemony has rested on the dollar’s reserve‑currency status and the petro‑dollar system. In the period 2020‑2025 three interlocking forces have converged: a heightened need for Venezuelan heavy‑sour crude, an unprecedented reliance on Chinese purchases of U.S. Treasury securities, and a widening domestic energy‑debt crisis. This study investigates the “triangular effect” of these dynamics on U.S. hegemonic stability. A mixed‑methods approach was employed. Primary data were collected through a structured, five‑point Likert‑type questionnaire administered to 40 post‑graduate students, academics, economists and investors; 26 usable responses were returned (65 % response rate). The questionnaire captured latent constructs—perceived sanctions effectiveness, financial risk from China, and perceived hegemonic decline—each measured by multiple items (Cronbach’s α = 0.88). Secondary data comprised annual macro‑indicators (2020‑2025) from the U.S. Energy Information Administration, the U.S. Treasury, the IMF and the Peterson Institute for International Economics. Descriptive analysis shows Venezuelan oil’s share of U.S. heavy‑sour imports fell from 12 % to 3 % while Chinese holdings of U.S. Treasuries rose from 17 % to 21 % of foreign holdings. Regression models with robust (Newey‑West) standard errors reveal: (1) a statistically significant negative relationship between Venezuelan oil dependence and the number of active U.S. sanctions (β = ‑0.48, p = 0.02, R² = 0.65); (2) a positive association between Chinese Treasury‑holding share and the primary budget deficit (β = 0.31, p = 0.03, R² = 0.58); and (3) a significant interaction effect of the two independent variables on perceived hegemonic decline (β = ‑0.42, p = 0.01, R² = 0.73). All three hypotheses are therefore accepted. The findings suggest that the United States is caught in a triangular squeeze that erodes both the objective capacity to enforce sanctions and the fiscal flexibility to sustain large deficits, while simultaneously undermining domestic and international confidence in its hegemonic position. The results extend Eichengreen’s (2011) “exorbitant privilege” thesis and align with Sachs’s (2020) warning of a looming energy‑debt nexus. They also corroborate Nogueira Batista’s (2021) claim that Chinese creditor status confers quiet leverage over U.S. policy. The study recommends diversifying heavy‑crude supply chains, broadening the sovereign‑bond investor base (including yuan‑linked instruments), redesigning sanctions to avoid wholesale oil embargoes, and pursuing multilateral currency cooperation to mitigate over‑reliance on the dollar. Future research should expand the sample size and extend the time series to capture longer‑term structural adjustments.