Whatever else the United States is up to around Venezuela, it’s probably not after the country’s oil.
There is lots of chatter—and plenty of memes—about U.S. interest in the world’s largest oil reserves. Similar shadows hung over the United States with Bolivia and its lithium in 2019—theories that were baseless but boundless.
Whatever else the United States is up to around Venezuela, it’s probably not after the country’s oil.
There is lots of chatter—and plenty of memes—about U.S. interest in the world’s largest oil reserves. Similar shadows hung over the United States with Bolivia and its lithium in 2019—theories that were baseless but boundless.
Still, there is reason to wonder, given U.S. President Donald Trump’s own oft-repeated complaint that the United States should have “kept the oil” from Iraq after the U.S. invasion, and because business interests seem to dictate much of Trump’s foreign policy.
But while some Republican lawmakers have said that Venezuela’s oil riches are the reason to invade, that is not the Trump administration’s official line. In fact, the clearest call about a threat to Venezuelan oil (aside from neighboring countries) came from the Caracas regime itself, in a letter sent to OPEC that accused Washington of angling to steal the country’s mineral wealth.
“It’s a Venezuelan regime narrative. There has never been an official U.S. statement about seeking Venezuela’s oil,” said Pedro Burelli, a former board member of Venezuela’s state-owned oil firm who advises Venezuela’s opposition groups.
The Trump administration’s stated reason for the military buildup in the region, which includes an aircraft carrier strike group and 15,000 troops, is to counter drug trafficking. But such a justification is hard to square with Trump’s issuing of a presidential pardon this week for a former president of Honduras who was one of the biggest drug traffickers of them all.
Late Monday, the Trump national security team met to plan its next steps regarding Venezuela, following a reportedly unproductive late November phone call between Trump and Venezuelan leader Nicolás Maduro. The country and the broader region are on edge, fearing a U.S. intervention and dreading what could come after.
There are 303 billion reasons to think that the United States has an ulterior motive in Venezuela because that is how many barrels of oil the country has in proven reserves, the largest in the world. Venezuela by itself accounts for roughly 17 percent of global oil reserves.
The problem is that it accounts for less than 1 percent of global oil production. That mismatch has bedeviled Maduro— and Hugo Chavez before him as well as all the leaders of Venezuela going back to the mid-1970s. It is precisely that mismatch that made one Republican U.S. lawmaker predict a “field day” for U.S. oil companies and oil service firms once the Bolivarian revolution is remanded.
Venezuela has lots of oil, and it is already found. The Orinoco Belt of heavy, tar-like oil is a dinosaur graveyard and sometimes a tombstone for oil companies that come prospecting. Chevron, the only U.S. oil firm that does business there, doesn’t even count its Venezuelan production in its quarterly and yearly figures; Venezuela is a very special case.
“The one thing you know for sure is that the oil is there,” said Jacques Rousseau, an oil analyst with ClearView Energy Partners, a Washington, D.C., consultancy. But it’s not good oil. It is sludgy and loaded with sulphur and requires mining, not even drilling, to tap it. The only virtue it has, from a U.S. perspective, is that the multibillion-dollar Gulf coast refinery complex built when the United States was still a net importer of oil is geared to the nasty stuff, not the sweet and light variety that gushes out of Texas wells.
“Long story short, there is high-quality oil and low-quality oil, and this in Venezuela is pretty low-quality oil. But what has happened is the refiners on the Gulf were built to process low-quality oil,” Rousseau said.
As Mexico’s production of heavy oil declines and Canada’s remains landlocked, that leaves few options for U.S. refiners who worry, despite a global oil glut, about a shortfall next year, should sanctions on Iran and Russia remove millions of barrels from the market. Trump does not like many things, but among the things that he hates most are high gasoline prices.
“If U.S. oil production in the Permian basin plateaus, and oil demand actually rises, there are only a few places that can provide those barrels,” said Francisco Monaldi, an expert on the Venezuelan oil industry at Rice University.
But that doesn’t mean that the U.S. military buildup in the Caribbean is about getting access to that oil.
For starters, the United States is already the biggest oil producer in the world, pumping almost 14 million barrels a day. Venezuela can’t quite crack 1 million a day, despite its below-ground riches.
Moreover, the Trump administration—and especially Secretary of State and National Security Advisor Marco Rubio—appear to have other priorities, which include reshaping the Western Hemisphere and slaying the ghosts of Fidel Castro by overturning socialist and communist regimes, including the one that has ruled Venezuela for decades and briefly flew a banner for regional revolution.
“I don’t think it’s about oil. I think it’s mostly about the broader agenda,” Monaldi said. “Rubio has very limited influence in some areas, but in this area, he has found a way to sell his strategy to MAGA voters.”
Venezuela’s oil industry has a future with or without U.S. military intervention, but it will require lots of investment, lots of patience, and lots of time. U.S. companies, like their Spanish, Italian and Chinese counterparts, will be welcome, some maybe more than others.
“You need to invest billions over a number of years to get oil out of Venezuela, once we have rules that are viable and credible. But that will not happen overnight,” Burelli said.
