This week, Venezuelan President Nicolás Maduro took unprecedented steps to establish control over the contested Esequibo region of neighboring Guyana, violating an International Court of Justice (ICJ) ruling. Esequibo, a region in western Guyana, accounts for two-thirds of the country’s territory, 16 percent of its population—and, crucially, would give Caracas a claim to offshore oil riches that Guyana recently found and that Venezuela clearly covets.

The fact that international arbiters marked the boundary lines well over a century ago won’t stop Maduro from claiming land that many Venezuelans have long been told is rightfully theirs. On Sunday, Caracas held a referendum to determine sovereignty over Esequibo despite the ICJ warning against threatening the status quo. The results, though heavily criticized, showed that 95 percent of voters were in favor of Venezuela annexing the disputed region.

With Caracas ordering mass arrests on Wednesday of those who allegedly oppose the annexation, regional forces gathering to defend the small nation, and the U.S. military conducting flight exercises in Guyana in a blatant show of support for Georgetown, Latin America is teetering on the edge of a potential major continental war for the first time in more than 75 years.

“Latin Americans love to say, ‘We haven’t had a major border conflict since the 1940s,’” said Christopher Sabatini, a senior research fellow for Latin America at Chatham House. “This would really sort of challenge their fundamental self-conception of their peaceful nature and the historical absence of interstate conflict.”

Well, who has the legal right to Esequibo?

Both nations lay claim to the land, which is a little larger than the U.S. state of Alabama, though much better endowed. Venezuela once had possession of it in the nine-tenths-of-the-law sense, but it was never a legal part of what became modern Venezuela, either before or after its independence. A Paris-based arbitration panel ruled in 1899 that the territory belonged to Guyana (well—at the time, to the British colony of British Guiana.) However, Venezuela long argued that the decision should be nullified, as the country’s government was not present during the talks but rather represented by the United States.

Last Friday, the ICJ ordered Maduro not to attempt to change the region’s status—just days before Caracas was set to hold its sovereignty referendum. The court did not, however, ban the vote from occurring despite Guyana pressuring the body to do so.

Venezuela’s government appears to be “taking steps with a view toward acquiring control over and administering the territory in dispute,” ICJ President Joan Donoghue warned following Venezuela’s blatant disregard of the court ruling.

“The ICJ has credibility, but it can’t enforce its ruling,” Sabatini said. However, that’s not to say it isn’t a big deal. If Venezuela were to use military force to take control of Esequibo, then it would likely damage the possibility of the ICJ ever ruling in its favor in the future. It would also slice Guyana by more than half and open a whole new can of ugly worms.

What makes the Esequibo region so worth coveting?

Home to significant swaths of the Amazon rainforest, Esequibo is a mineral-rich territory, containing vast gold and copper deposits. In 2015, the region’s worth skyrocketed after ExxonMobil discovered large quantities of oil off its coast, setting Guyana up to become the richest nation in Latin America on a per capita basis. Just offshore and almost, but not quite entirely, in Guyana’s exclusive economic zone, is an oil gusher with at least 11 billion barrels of crude.

If Venezuela were to grab Esequibo, then it could lay claim to basically all of that offshore wealth.

Now, billions of dollars and thousands of beefsteaks pour into Georgetown, the capital of a once-backwater, now-developing nation. Guyana has used the funds to launch major infrastructure developments, its first deep-water port, and a gas-to-energy project that would double the nation’s energy output while cutting power bills in half. And in September, it announced its intention to sell oil to big players, including China’s, Qatar’s, and Malaysia’s state oil companies—further triggering Venezuela’s economic jealousy.

Venezuela, which was once a major oil producer, now pumps half as much as the U.S. state of New Mexico. It has long struggled with debilitating hyperinflation and low public approval. According to the International Monetary Fund, Caracas suffered the world’s highest consumer price increase this year, with inflation reaching 360 percent. Corruption continues to roil Maduro’s autocratic regime, and efforts to crack down on the country’s opposition, including barring favored presidential candidate María Corina Machado from holding office, have done little to elevate his chances of winning reelection next year.

Maduro hopes that establishing control over Esequibo would give him a claim to big oil, bolster support for his United Socialist Party, and pigeonhole the opposition into appearing anti-patriotic at a time when his regime is looking more and more like a “tin-pot dictatorship,” Sabatini said.

So, what happened with this referendum?

Depends on whom you ask. According to Maduro, millions of Venezuelans took to the polls in the nation’s highest election turnout in history. But without evidence to back his claim, rights groups estimate that only around 2 million people went to the ballot boxes.

According to the government, more than 95 percent of voters approved all five questions on the referendum, which called for the creation of a new so-called Guayana Esequiba state as well as granting its residents Venezuelan citizenship, providing the population with identity cards, incorporating Esequibo onto Venezuela’s map, and rejecting the 1899 ruling.

“A new era in the fight for our Guayana Esequiba has begun,” Maduro said in celebration of the results. “Now we will recover Venezuela’s historical rights.”

In an aggressive speech on Tuesday, Maduro proposed a new law that bans all Venezuelan companies from collaborating with Guyana, and on Wednesday, he appointed Maj. Gen. Alexis Rodríguez Cabello to oversee the newly established state. Military intelligence suggests that Caracas is also building an airstrip at La Camorra, near its border with Guyana, to support logistical operations for annexing Esequibo. And Maduro has threatened foreign firms, including ExxonMobil, from working with the Guyanese government.

One thing: Venezuela has more oil reserves than any country on Earth. What’s it need more for?

That’s a good question, especially since Venezuela has enough trouble getting its own oil out of the ground as is—let alone wading into tricky offshore drilling that requires technological expertise, good management, and plentiful capital, none of which has been on display in Caracas for years.

If anything, Maduro hopes that redressing a century-old wrong, with oil to boot, will boost public confidence in his increasingly unpopular administration. But the probability of that making a large dent in polling for next year’s election is unlikely.

How is the rest of the region responding?

Guyana immediately placed its own defense forces on high alert and called on the U.N. Security Council and ICJ to take immediate action to bar Venezuela from further encroaching on its soil. Brazil’s defense ministry “intensified its defense actions” and boosted its military presence near the disputed border. And the U.S. Southern Command conducted military exercises with Guyana on Thursday to demonstrate its strong bilateral commitments to Georgetown.

Interstate war would be “suicidal” for Maduro’s political ambitions, a Venezuelan energy expert said, speaking on condition of anonymity for fear of government retaliation. “Maduro might be emboldened by the fact that the conflict in Ukraine and the conflict in the Middle East makes it harder for the U.S. to have another front or potential conflict in this region,” the expert added. “And so, people read this as a dangerous situation because it opens up Maduro’s perception that he might get away with doing something.”

Maduro initially promised not to invade Venezuela’s eastern neighbor. But escalating tensions, including Caracas accusing ExxonMobil on Wednesday of working in tandem with Guyana and Venezuelan dissidents to undermine the government, are worrying regional leaders that annexation may be in the cards after all. If that’s the case, then Latin America may impose a multilateral peacemaking force to diffuse the situation—which would likely hurt Venezuela in the long run.

Caracas looks weak, Sabatini said. “As it sort of hurtles toward an uncertain outcome on this, it also puts its own survival at risk. I would say in some ways, quite frankly, what it’s doing to Guyana is probably far more dangerous to its survival, its instability, than the prospect of an election in 2024.”