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Yves right here. This submit comprises very helpful details about the viability of the US exploiting Venezuelan oil, on the optimistic assumption that it might achieve conquest or regime change. However it’s concurrently a peculiar train in messaging and thus additionally makes for additionally a helpful important pondering train.
The brief model is that this text explains why Venezuela’s oil is just not of a lot strategic worth to the US and its infrastructure would take quite a lot of funding over a very long time to convey as much as snuff. But Trump has shifted his justification from narco-terrorism to, erm, retaking the oil and different belongings, in going to struggle with Venezuela (recall a blockade is an act of struggle):
Recall that after the weapons of mass destruction justification for the Iraq struggle fell aside, the Administration then offered a collection of pretexts, whilst most observers argued that the oil was the rationale. Iraq then had the world’s second largest confirmed reserves, and so they had been extremely prized gentle candy crude. And whereas the US nonetheless has substantial management over Iraq’s oil exports, the US had been sluggish to spend money on Iraq’s oil infrastructure. I can’t discover the supply, however I recall studying that the majors weren’t comfy the US degree of exploitation of the Iraqi useful resource.
A 2024 article in The Cradle describes the state of play:
In July, the Iraqi Central Financial institution halted all overseas transactions in Chinese language Yuan, succumbing to intense stress from the US Federal Reserve to take action. The shutdown adopted a short interval throughout which Baghdad had allowed retailers to commerce in Yuan, an initiative meant to mitigate extreme US restrictions on Iraq’s entry to US {dollars}.
Whereas this Yuan-based commerce excluded Iraq’s oil exports, which remained in US {dollars}, Washington seen it as a risk to its monetary dominance over the Persian Gulf state. However how has the US managed to exert such complete management over Iraqi monetary insurance policies?
The reply lies in 2003, with mechanisms established following the unlawful US-led invasion of Iraq.
Because the signing of Government Order 13303 (EO13303) by President George W Bush on 22 Could 2003, all revenues from Iraq’s oil gross sales have been funneled straight into an account on the Federal Reserve Financial institution of New York.
A 2012 Aljazeera story intimated that the Western companies, despite the fact that they gained the important oil concessions after the struggle, had not carried out in addition to they’d hoped, confirming the concept the exploitation of the Iraq useful resource was not dealt with in an expeditious method.
I’m certain some readers know this chapter significantly better than I do, so enter can be very a lot appreciated. However my impression is that the later theories, that Iraq was a stepping stone on the best way to subjugating Iran, and the oil was at most a secondary goal, are heading in the right direction.
So struggle in opposition to Venezuela is just not about narco-terrorism, and never in regards to the oil, what’s the cause? Subduing Cuba could possibly be a justification, however that is an awfully expensive approach to go about it. It seems like a really badly conceived plan to revive America’s manhood, through throwing a perceived-to-be-weak nation in opposition to the wall. Keep in mind when Trump tried punching similarly-underestimated India with secondary sanctions to get them to cease importing Russian oil, that didn’t work out both. However Trump managed to seek out his approach awkwardly to an off ramp. He advised the Europeans that he would sanction Russian oil consumers in the event that they did, and so once they refused, he might retreat. How does he get out of this misguided escalation?
John Mearsheimer, in a brand new dialogue with Choose Napolitano, is bemused on the mess Trump has gotten himself into, however you will note he left out the problem of why we picked this combat within the first place. See beginning at 2:34:
Mearsheimer: Effectively, I believe what the administration is making an attempt to do right here is work out a approach to get out of the nook that they’ve boxed themselves into on this Venezuela scenario. I imply, we determined early on that we had been going to get robust with Venezuela that it was this nice risk to the US and that we might be capable of cope with it fairly simply. However that’s not proved to be the case in any respect.
And what you see the Trump administration doing is fishing round for a approach to cope with this downside. And that principally means eliminating the Maduro authorities and taking this large downside that we’ve created off the desk.
And also you bear in mind at first Trump was speaking about the truth that the CIA was working inside Venezuela. After which he escalated additional and we began destroying these boats and killing harmless individuals on board these boats. Then he began speaking a few land invasion or hinting at a land invasion. Then he mentioned that the airspace over Venezuela was closed they’re seizing tankers and so they’re speaking about placing some type of blockade on Venezuela.
All these totally different approaches are as a result of the truth that the Trump administration is unable to determine the best way to cope with the Maduro authorities in a approach that they’ll save face. They’re in an actual pickle. The administration is in an actual pickle. And that’s what explains what’s happening with the seizing of this specific ship and the blockade that’s now been introduced by Trump.
Napolitano: You understand, you talked about the altering I wouldn’t even name them theories, the altering arguments superior for the interference with Venezuela in 2017, his first yr of his first time period when he addressed the joint session of Congress. He famously launched the individual he mentioned was the president of Venezuela and it was this younger man Juan Guyaido who by the best way right this moment is a grad scholar uh in Miami, Florida. Anyway, on the time launched him because the true president. The Congress gave him, you recognize, a profound and prolonged um standing ovation and we had been going to get him again there as a result of he’s the one who gained the election. All proper, quick ahead and properly, it’s fentinyl. Effectively, it seems the Drug Enforcement Administration, his personal, says, “No, the fentanyl is made in Mexico. Then it’s cocaine.” Then his Drug Enforcement Administration mentioned, “No.” Venezuela as soon as did ship cocaine right here, however they don’t anymore. Then two days in the past, he mentioned Venezuela stole our land and stole our oil. May he presumably suppose {that a} pure useful resource beneath Venezuela belongs to the US? My level is, you’re proper. He’s boxed in and now scrambling for a justification for the boxing in. The boxing in, in line with Colonel Wilkerson, is costing a billion greenback a day.
Mearsheimer:. However I simply wish to say what you mentioned is essential and what I mentioned is essential, however we’re speaking about two various things. And it simply reveals you the way determined the administration is. You had been speaking in regards to the rationale or the totally different rationales plural for what they’re doing and the way that shifts and I used to be speaking in regards to the totally different methods that they’re utilizing and the way that has been over time and what you see is that they’re flailing. He’s boxed himself right into a nook.
Now to the primary occasion.
By Matthew Smith, Oilprice.com’s Latin-America correspondent. Initially printed at OilPrice
- Regardless of accusations from Venezuelan and Colombian leaders, the immense development in U.S. home oil manufacturing and reserves considerably diminishes the strategic want for Washington to grab Venezuela’s oil fields.
- The U.S. Gulf Coast refining business has largely transitioned away from Venezuelan heavy crude as a result of facility closures and a shift towards different suppliers like Canada, Mexico, and home shale sources.
- Restoring Venezuela’s dilapidated oil infrastructure to main export ranges would require over a decade of labor and tens of billions in funding, making a army seizure economically impractical for the US.
President Trump’s large naval build-up off the coast of Venezuela and the risk of invasion was labelled by the nation’s illegitimate President Nicolas Maduro as a bloody seize for oil. Different Latin American leaders, notably Colombia’s leftist President Gustavo Petro, are making related assertions. An extended historical past of U.S. intervention to safe important fossil gasoline assets, coupled with Venezuela controlling the world’s largest confirmed crude oil reserves totaling 303 billion barrels, helps this rationale. There are, nonetheless, many causes indicating that Washington’s army marketing campaign is just not a thinly veiled try to seize management of Venezuela’s huge petroleum reserves.
An autocratic Maduro not solely survived Trump’s strict sanctions however handled them as a chance to consolidate his grip on energy. Even civil dissent manifesting within the type of violent protests and the specter of a coup from inside Venezuela’s army didn’t topple the authoritarian Maduro regime. By 2021, Venezuela’s economic system had returned to development, due to rising oil exports in defiance of U.S. sanctions and the common circulate of condensate from Iran. Tehran even offered the experience and components to refit Venezuela’s ailing refineries to spice up gasoline manufacturing, at a time when an vitality disaster engulfed the nation.
Even with the Trump White Home providing a $50 million bounty and ratcheting up sanctions, Maduro to this point has maintained his grip on energy. In response the White Home, since August 2025, has amassed a big naval armada within the southern Caribbean, ostensibly to cease the circulate of cocaine to the US. Though Trump’s aim is unclear, many analysts declare his aggressive gunboat diplomacy is designed to topple Maduro. Venezuela’s illegitimate president and a few regional leaders argued publicly that the White Home marketing campaign is a violent seize for Venezuela’s huge oil reserves, which at 303 billion barrels are the world’s largest.
Maduro, lower than a month in the past, accused Washington of looking for to make use of army pressure to applicable the nation’s huge petroleum assets illegally. President Petro of neighboring Colombia, at across the identical time, asserted in a CNN interview that “(Oil) is on the coronary heart of the matter,”. He went on to declare, “So, that’s a negotiation about oil. I imagine that’s (US President Donald) Trump’s logic. He’s not excited about the democratization of Venezuela, not to mention the narco-trafficking.”
After the U.S. Coast Guard seized a sanctioned tanker, the M/T Skipper, off the coast of the pariah South American state carrying 1.9 million barrels of Venezuelan heavy crude final week, the rhetoric intensified. Venezuela and Colombia’s presidents each strongly accused Washington of piracy and theft. Maduro known as it an act of worldwide piracy after earlier declaring that Venezuela wouldn’t change into a U.S. oil colony. Petro said, “They’ve simply seized a ship, it’s piracy, oil, oil, that’s, they’re demonstrating why they’re doing what they do. Oil, oil and oil,”.
Each Latin American leaders ramped up their rhetoric regardless of the tanker working in defiance of U.S. sanctions. The tanker was transporting 1.9 million barrels of Merey, Venezuela’s foremost export-grade heavy oil, with an API gravity of 15 levels and a couple of.15% sulfur content material, to Cuba, then to Asia, with China and India key consumers of U.S.-sanctioned oil. The Skipper’s repeated transportation of sanctioned Venezuelan crude oil led the U.S. Coast Guard to obtain a court-issued warrant for the tanker, which expired solely days after the seizure. That is the primary tanker seized by the U.S. since strict sanctions on Venezuelan crude oil had been imposed in 2019.
The White Home and State Division have constantly denied accusations that the army motion in opposition to Venezuela is motivated by securing management of the nation’s crude oil. U.S. authorities representatives have repeatedly reaffirmed that the mission known as Southern Spear is about stopping the circulate of medicine and unlawful migrants to the US. Whereas these targets are a part of the army operation, there are indicators the U.S. mission goals to stress a extremely unpopular Maduro into stepping down so Venezuela can return to democracy. Certainly, there’s little or no rationale for the claims that Washington wants management of Venezuela’s huge oil reserves.
The U.S., because the world’s main petroleum producer, doesn’t have to forcibly acquire Venezuela’s huge oil reserves. During the last 20 years, U.S. manufacturing has grown at a surprising clip. U.S. Vitality Info Administration (EIA) knowledge present it greater than tripled, from 4.2 million barrels per day in September 2005 to 13.8 million barrels per day in September 2025. Importantly, it’s anticipated that U.S. oil manufacturing will proceed to climb, with the EIA predicting it might attain 18 million barrels per day by the early 2030s. This large growth is supported by the stable developmentof U.S. proved oil reserves, which between 2003 and 2023 doubled from 23 billion to 46 billion barrels.
The beautiful development of U.S. petroleum reserves and manufacturing over the past twenty years, due to the shale oil growth, is so vital that by 2019, the world’s second-largest client of fossil fuels emerged as a internet vitality exporter. In truth, by September 2025, the U.S. EIA reported oil imports of just below 250 million barrels, which was greater than a 3rd lower than the 397 million barrels imported for that month 20 years earlier. This level is vital as a result of, not like the interval from 1958 to 201,8 when the U.S. imported extra oil than it produced, the nation is now now not economically reliant on overseas petroleum imports.
Some analysts argue that even with U.S. oil reserves and manufacturing increasing at such a powerful clip, demand for Venezuela’s low-cost heavy crude stays robust. You see, in the course of the Eighties, Venezuela’s heavy crude emerged as a pretty feedstock for U.S. Gulf Coast refineries. This was as a result of decrease costs than the WTI and Brent benchmarks, copious manufacturing volumes of round 2 to three million barrels per day and the shut neighborhood of these oilfields to the US. Venezuela’s steady democracy, with Caracas sharing shut ties with Washington as a staunch ally in opposition to communism in Latin America, enhanced the attractiveness of the nation’s crude oil.
At the moment, many Gulf Coast refineries had been constructed or retrofitted with the gear wanted to course of the heavy bitter crude oil produced in Venezuela. This left them unable to refine lighter, sweeter petroleum grades cost-effectively, making these services depending on Merey in addition to different Venezuelan heavy oil grades like Hamaca and Boscan. For these causes, some analysts declare Venezuela’s heavy oil is important for the worthwhile operation of a swathe of Gulf Coast refineries and bolstering U.S. vitality safety. This, they assert, is the cause for Trump’s aggressive gunboat diplomacy and the deliberate seizure of Venezuela’s huge heavy oil reserves.
Whereas this was true three or 4 many years in the past, it’s removed from actuality right this moment. You see, plummeting refining margins and hovering working prices led the U.S. refining business to contract sharply from the mid to late Nineteen Nineties. This pressured the closure of a swathe of higher-cost Gulf Coast refineries, significantly these processing heavy bitter crude oil grades, to shutter or be transformed to extra worthwhile makes use of over that interval. EIA knowledge reveals 27 Gulf Coast refineries with a mixed distillation capability of 832,426 barrels per day had been completely shut down from January 1, 1990, and January 1, 2025. Many others had been transformed to refine lighter, sweeter grades of crude oil or to course of biofuels.
Because the early 2000s, Gulf Coast refineries nonetheless depending on heavy bitter crude oil have been pressured to seek out different provides. It was Canada, the world’s largest producer of heavy crude, adopted by Colombia and Mexico, which stuffed the hole. A mix of sharply weaker oil costs, malfeasance and tighter U.S. sanctions weighed closely on Venezuela’s oil manufacturing. Between 1997, 2 years earlier than Hugo Chavez’s revolutionary presidency, and 2015, petroleum output plummeted from 3.5 million to 2.7 million barrels per day. Throughout 2020, it plunged additional, hitting an all-time low of 570,000 barrels per day.
Whereas Venezuela’s petroleum manufacturing has recovered, significantly after U.S. vitality supermajor Chevron was granted a restricted license to elevate oil within the pariah state, shipments to the usare at all-time lows. For September 2025, the U.S. imported 3 million barrels of Venezuelan crude oil, which is lower than 1/13 of the 41 million barrels obtained in that month 20 years earlier. These numbers underscore simply how irrelevant Venezuelan petroleum is to a considerably diminished U.S. refining business, significantly on condition that home manufacturing remains to be rising at a wholesome clip. Certainly, over that interval, the variety of operable U.S. refineries has fallen from 148 in 2005 to 132 initially of 2025.
Even when the U.S. seized Venezuela’s huge petroleum assets it might take a minimum of a decade and tens of billions of {dollars} to rebuild shattered business infrastructure. Venezuela’s present oil manufacturing right this moment, which OPEC knowledge reveals to be 934,000 barrels per day, is a far cry from the practically 3 million barrels per day lifted 30 years earlier. An funding of $58 billion is required to elevate manufacturing to a modest 1 to 2 million barrels per day, which is inadequate to return Venezuela to a serious petroleum exporter. For that to happen, an funding of $10 to $12 billion yearly for a minimum of a decade, possible far longer, is required to rebuild closely corroded wellheads, pipelines, processing vegetation and storage services.
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