Venezuelan Oil: The Stakes of the Trump Operation

During the night of 2 to 3 January, the United States conducted a military operation in Venezuela, resulting in the kidnapping of President Nicolás Maduro. Although officially justified by the fight against drug trafficking and by the alleged threats that the Maduro regime posed to US domestic security, the energy question appears central to the reasons behind this operation. Oil, in particular, occupies a key place in Donald Trump’s strategic vision, in which energy resources are used as an instrument of power and an assumed national priority. An overview with Francis Perrin, Research Director at IRIS and specialist in energy issues.

Given what Venezuela represents in the petroleum sphere, in terms of reserves, production, and its role in global energy balances, how should Washington’s strategy be understood? What are its short- and/or long-term ambitions?

Venezuela is indeed a major oil issue, especially in terms of proven reserves. Several key sources, such as OPEC and the U.S. Energy Information Administration, cite the figure of 300 billion barrels. Not everyone agrees with this estimate, but it is certain that the country has very significant potential. If one accepts the figure of 300 billion barrels, Venezuela would hold the world’s largest proven oil reserves ahead of Saudi Arabia. Paradoxically, the country produces rather little and exports rather little oil. In terms of crude oil production, it has stood at only between 800,000 and 1 million barrels per day (b/d) over recent months, that is, less than 1% of global oil production and ten to eleven times less than Saudi Arabia, the world’s second-largest producer after the United States. In rankings, Venezuela comes only between 18th and 20th place, depending on the period considered. Some 25 years ago, this production was at least three times higher than it is today. It is therefore a real collapse since the beginning of this century.

Within the Trump administration, it is believed, particularly by the president and vice-president, that Venezuela “stole” oil from the United States, referring to nationalisations/expropriations at the end of the 2000s of assets partly controlled by US firms. According to this view, the United States should therefore be repaid—willingly or by force. Another key element: controlling Venezuelan oil increases US power on the global oil market and over oil prices, notably in a medium- and long-term perspective. This could contribute to lowering oil prices, which has been one of Donald Trump’s explicit objectives for a year. Furthermore, taking control of Venezuela’s oil exports, which Washington achieved a few days ago, allows it to hit several targets at once: Cuba will no longer be able to import Venezuelan oil on very favourable commercial terms, and China, the main buyer of Venezuelan crude, will no longer be able to obtain this oil for free or almost for free. As Marco Rubio, Secretary of State and National Security Adviser, has said, “we do not want countries outside the American continent who are our adversaries to control strategic assets in our region”—a very clear reference to China. Finally, using oil as a means of pressure through the control of exports is an effective way of ensuring that the Venezuelan authorities distance themselves from Iran and Hezbollah. One can obtain many things with oil.

What impact does or could this takeover or US influence over Venezuelan oil have on global oil markets? What reactions should be expected from other major oil players in the world, or from states most affected by this seizure?

It is indeed a takeover. The United States is imposing an oil quarantine on Venezuela with an impressive naval force and will commercialise the oil and refined products exported by the country. The proceeds from these exports will be deposited in bank accounts outside Venezuela, over which the government will have no control. President Trump will decide how much of these revenues (not yet determined) will be allocated to Caracas. The noose is therefore very tight.

The impact on the oil market is very limited for the time being. Between 2 January, the eve of the US military action in Caracas, and 9 January, the price of Brent crude from the North Sea rose by barely three dollars. Moreover, Venezuela is not the only issue in global oil news. One must also factor in the war in Ukraine and rising tensions in Iran. This means that the specific impact of the situation in Venezuela is very small, almost negligible. This market indifference is explained by the fact that the country produces rather little oil, as noted above, and that the global oil market is very well supplied. Due to rising production in several American countries (United States, Canada, Brazil, Guyana, and Argentina) and several members of the OPEC+ coalition, including Saudi Arabia, global oil supply is growing far more rapidly than demand, and there is therefore no concern regarding short-term supply/demand balances. Oil markets would obviously be more affected if Venezuela were able to significantly increase its production and exports, but this would require a great deal of time and investment.

Like the rest of the world, oil actors are stunned by what happened in Caracas on 3 January and by the oil-related consequences of this military operation. Major oil companies are being encouraged by the Trump administration to invest tens of billions of dollars in Venezuela, but they remain very cautious for now given the considerable political and economic uncertainties in the country. Iran and Cuba face major internal problems. The European Union is focused above all on the war in Ukraine, its relations with the United States, and the future of NATO, and does not wish to antagonise Donald Trump. As for China, it understands very well what is at stake and sees Washington’s strategy clearly, but it will need some time to prepare its response. The United States is also sanctioning Iran and Russia, two countries for which China is likewise the main export market for their oil.

Does what is happening in Venezuela signal, in your view, a return of oil as a central tool of power and geopolitical pressure? Could this influence global energy trajectories, in particular ambitions linked to the green transition?

It is difficult to speak of a “return”, as this would imply that oil had ceased to be a central tool of power and geopolitical pressure. Oil has long fulfilled this role and will continue to do so for a long time. Of course, a central tool does not mean the only central tool. Likewise, in the case of Venezuela, oil is not the only key element, but it is a key element. One may also think of very different situations such as the war in Ukraine and several tensions and conflicts in the Middle East. And the Trump administration is fully aware of the central role of oil.

Global decarbonisation ambitions face several obstacles, including the weight of oil and of fossil fuels (oil, coal, and natural gas). These account for roughly 80% of global energy consumption and have shown great resilience. Behind oil, there are also many interests, state and non-state alike. And the return to power a year ago of Donald Trump, who considers climate change and “green” energy to be scams, whose key slogan is the famous “Drill baby, drill”, and who fully supports all fossil fuels, represents a major obstacle. After withdrawing his country from the Paris Climate Agreement (COP21, Paris, December 2015) on 20 January 2025, the US president announced a few days ago the withdrawal of the United States from the UN Framework Convention on Climate Change and from the IPCC. COP30, held in November 2025 in Belém, Brazil, was not a great success, to say the least.

The decline of oil has long been predicted, but for the moment it is doing very well. Global oil consumption and production are at record levels and continue to grow, the global oil market is very well supplied, and prices are relatively low, at least at present. That said, solar and wind energy have been expanding rapidly for several years, and the electricity-generation sector is genuinely undergoing gradual decarbonisation. To date, however, the share of fossil fuels has not begun to decline. This will happen, but they will remain dominant for quite some time.