Venezuela oil. Photograph: AFP (file)
KARACHI:
President Donald Trump has stated that Venezuela’s interim authorities will ship as much as 50 million barrels of oil to the US. “We’ll be utilizing oil, and we’ll be taking oil. We’re getting oil costs down,” he added.
Trump would not say for the way lengthy the US will “run” Venezuela, however what he did say was that the income from its oil “will probably be managed by me”. Trump earlier stated that the US oil business can be “up and working” in Venezuela inside 18 months and that he anticipated huge investments to pour into the Latin American nation.
This implies the interim authorities is buckling underneath stress from the US president. Trump has threatened extra army motion, if the interim president, Delcy Rodriguez, would not give the American firms “complete entry” to Venezuela’s oil business, and sever financial ties with China, Russia, Iran and Cuba.
This makes the strategic intent of Trump’s army operation in Venezuela unmistakably clear. The cat is out of the bag. The guessing sport ought to finish now. This blatant train of American geopolitical energy was by no means about “drug cartels”. It was by no means about “narco-terrorism.” It was by no means about democracy. It was about oil. Interval. It was about useful resource seize. Interval. Trump needed to grab management of vitality property of Venezuela, which has almost 17% of the world’s recognized oil reserves, and reshape the worldwide oil provide chain by power.
It is not the primary time the US has executed this. American presidents have executed this prior to now too – in Iran, in Libya, in Syria, and in Kuwait. Previously, nonetheless, US army interventions had been usually wrapped in ideological or safety justifications to make them extra palatable. The 1953 US-backed regime change in Iran was framed as a obligatory measure to include communism. Comparable rationales had been provided over Libya, Iraq, Syria, and Kuwait, the place army intervention, sanctions, or coercive diplomacy coincided carefully with strategic vitality pursuits.
It’s the similar playbook. The identical script. Solely the excuse has modified. Trump unilaterally declared Venezuela a “narco-terrorist” state and its president, Nicolas Maduro, an “illegitimate dictator,” earlier than ordering illegal strikes on so-called “narco boats” within the Caribbean Sea. He then imposed a blockade on Venezuela in mid-December, a marketing campaign that culminated within the dramatic seizure of Maduro and his spouse by US particular forces in a army operation extensively condemned as a violation of the UN Constitution and worldwide regulation.
Trump, nonetheless, did not go for a regime change. As a substitute, he signalled that Rodriguez, Maduro’s deputy, ought to “do the proper factor”- a not-so-veiled warning that her political survival is dependent upon cooperation with the US. The target: a direct management over Venezuela’s huge oil reserves. What to anticipate subsequent? American vitality companies re-entering Maduro’s nation, injecting capital, and imposing technological and operational management, folding Venezuela’s petroleum business right into a US-led vitality system.
Surprisingly, oil markets have reacted with restraint. When buying and selling opened on January 5 – two days after the Venezuela operation – Brent crude briefly fell 1.2% to round $60 a barrel, whereas WTI dipped earlier than recovering by the shut. This obvious calm masks deeper uncertainty. World oil markets are at present characterised by weak demand and oversupply. By 2025, the worldwide crude surplus had reached almost 3.8 million barrels per day – and geopolitical dangers had been already priced in.
Venezuela’s oil manufacturing, crippled by years of sanctions, averaged simply 934,000 barrels per day in late 2025 – lower than 1% of complete international provide. Brief-term disruptions can due to this fact be absorbed by different producers. Markets, too, have grasped the logic of Trump’s ultimatum: Venezuela has little alternative however to lift output. With American firms poised to guide “reconstruction”, there’s a rising sense that manufacturing might finally get better to round 3 million barrels per day. Because of this, merchants see restricted short-term affect however enormous long-term dangers of oversupply.
At the same time as greater than 17 million barrels of Venezuelan crude reportedly stay stranded offshore and a few fields face emergency shutdowns, costs have averted sharp volatility. Nonetheless, analysts warn that the broader penalties prolong past headline costs. Venezuela is a serious provider of heavy crude, important for a lot of refineries in Asia and Europe. Disruptions have compelled refiners to hunt alternate options from West Africa and the Center East, pushing up substitute crude costs, refining prices, and delivery dangers, notably within the Caribbean. Price pressures are due to this fact rippling by the refining worth chain, even with no value spike.
Extra strategically, the US seems intent on “camp-aligning” the worldwide oil provide chain. American companies plan to safe improvement rights in Venezuela’s Orinoco heavy oil belt and redirect exports away from conventional patrons in direction of the US market. Lengthy-standing importers akin to India are being compelled to rebuild provide chains. This isn’t a routine redirection of commerce flows however a deliberate fragmentation of the worldwide oil system, binding entry to vitality to geopolitical alignment with US pursuits. A divide is rising between a US-led provide bloc and a non-cooperative camp, signalling a shift away from globalised vitality markets in direction of strategic segmentation.
One other goal is to undermine the OPEC+ alliance. By securing management over Venezuela’s huge oil reserves, the US goals to create a serious provide lever outdoors OPEC+, offsetting the bloc’s capacity to handle output. Indicators of abrasion are already seen. Regardless of repeated manufacturing changes, OPEC+ affect has waned because the US has develop into the world’s largest oil exporter. Inner fissures have deepened, with Saudi Arabia favouring cuts to assist costs, whereas Russia prioritises output to defend market share amid sanctions.
US intervention additionally aligns with broader Trump’s “America First” vitality doctrine. Restoring Venezuelan output underneath US company management would seemingly return its oil commerce to dollar-based settlement, reinvigorating the petrodollar system and neutralising de-dollarisation efforts, particularly from the World South. On the similar time, Washington continues to sanction international locations experimenting with non-dollar vitality commerce, in search of to protect financial dominance. This hegemonic reconstruction dangers eroding belief in international vitality governance, making geopolitics – quite than provide and demand – the first driver of markets.
Within the brief time period, US army motion is predicted to intensify volatility and threat premiums, with Brent crude seemingly fluctuating between $58 and $63 per barrel. Nonetheless, fundamentals stay weak. The Worldwide Power Company tasks a surplus of as much as 4 million barrels per day in 2026, suggesting costs could retreat as soon as geopolitical tensions stabilise.
Within the medium time period, if US management consolidates and Venezuelan manufacturing recovers, oversupply pressures will intensify, notably alongside enlargement within the Gulf and sustained US output. Over the long run, the worldwide oil system could evolve right into a tripolar construction dominated by the US, the Center East, and Russia, additional weakening OPEC+. Mixed with fast-paced vitality transition and slowing demand development, this fragmentation will reshape vitality geopolitics for years to come back.
America’s express pursuit of oil sources has reshaped energy dynamics within the international vitality market. Whereas this technique could ship short-term beneficial properties, historical past exhibits violations of sovereignty and unilateral management over sources inevitably provoke resistance and long-term instability.
The author is an unbiased journalist with a particular curiosity in geoeconomics
