As emphasized in the newly published National Security Strategy, President Donald Trump’s administration has placed renewed focus on maintaining influence and control in Latin America. Washington’s growing pressure on Venezuela is a clear expression of this new foreign-policy doctrine, with the recent seizure of an oil tanker off the Venezuelan coast marking the latest escalation. Against this backdrop, it is important to understand how the country’s oil sector has become part of a larger geopolitical contest.
Since the United States imposed sanctions on Venezuelan crude in 2015, the country’s oil production has deteriorated dramatically. Years of declining oil revenue caused a massive drop in investment in energy infrastructure, meaning that even a full lifting of sanctions would make it extremely difficult to revive output to anything resembling its “glory years.” Nonetheless, some relaxation of sanctions in recent years allowed Venezuela to lift production noticeably. However, the latest escalation from the White House — including strikes on suspected drug-smuggling boats and the seizure of a tanker — has injected new uncertainty into the outlook for Venezuelan output.
Venezuela holds the largest oil reserves in the world, yet today contributes just 1% of global supply. The country accounts for roughly 17% of global proven reserves, with more than 300 billion barrels. By comparison, the United States holds about 81 billion barrels. In the mid-1990s, Venezuela produced around 5% of the world’s oil.
But years of mismanagement, under-investment, and U.S. sanctions caused production to collapse. The extremely heavy nature of Venezuelan crude also makes extraction costly and technically complex. With U.S. sanctions still in place, most Venezuelan oil now flows to China through “shadow fleets,” allowing both countries to circumvent restrictions.
In recent months, the Trump administration has expanded its military presence near Venezuela. Trump ordered the destruction of several small boats in the region, accusing those onboard of trafficking drugs for major cartels. The administration said U.S. forces have killed at least 87 people in 22 acknowledged strikes in the Caribbean and eastern Pacific since early September. This marks the largest U.S. military presence in Latin America in decades, prompting speculation that ground operations could be the next step.
In December, Venezuelan President Nicolás Maduro claimed the real motivation behind U.S. military action was oil, a charge the U.S. State Department quickly denied. Colombian President Gustavo Petro agreed with Maduro’s assessment, saying the three-month military campaign against Caracas amounted to nothing more than “oil negotiations.” Petro added that Trump “is not thinking about Venezuelan democracy, and not even about drug trafficking.”
Trump has made his position on Maduro clear, pushing openly for regime change. In late November, reports indicated that Trump gave Maduro a deadline to step down. Maduro reportedly demanded “global amnesty” for himself and his allies. According to leaks to the Miami Herald, Trump told Maduro: “You can save yourself and your closest circle, but you must leave the country now.” The same reports said Trump offered safe passage for Maduro, his wife, and his son, “only if he agreed to resign immediately.”
Even with Trump’s clear desire to remove Maduro, the question of whether he is seeking direct control of Venezuelan oil remains uncertain. Given the challenges of extracting Venezuela’s ultra-heavy crude and the severe deterioration of the country’s energy infrastructure, reviving output would be far from easy. Francisco J. Monaldi, director of the Latin America Energy Program at Rice University’s Baker Institute, estimates Venezuelan output at just under one million barrels per day today and suggests it could rise to 4–5 million barrels per day only if $100 billion were invested over ten years.
Legal scholar and Venezuelan oil-industry expert José Ignacio Hernández noted that “Venezuela’s oil sector is destroyed… It is not an attractive short-term market, especially for a country like the United States, which already has the world’s largest oil production.” He added that Maduro has already offered U.S. firms access to oil and gold projects in Venezuela. “If Trump wanted an exclusive deal to control Venezuelan oil, he would have accepted Maduro’s offer,” Hernández said.
Oil operations in Venezuela are believed to be divided roughly as follows: PDVSA holds about 50%; Chevron around 25%; Chinese-led joint ventures 10%; Russian companies 10%; and European firms 5%. Since Trump loosened restrictions on Chevron’s operations in Venezuela, the U.S. firm has been importing roughly 150,000–160,000 barrels per day into the United States.
Experts also note that even if the regime were replaced, Venezuela is unlikely to hand over its oil assets outright to the United States. Any new government would avoid appearing to surrender the country’s key resources, which could provoke domestic blowback. However, it may allow greater participation from global oil companies in exchange for the massive investments required to rehabilitate the country’s collapsed energy infrastructure.
With the opposition leader emerging from hiding to accept the Nobel Peace Prize, and with the United States seizing an oil tanker off the Venezuelan coast, Washington’s push to unseat Maduro appears far from over.
