Everything Trump is doing in Venezuela and South America involves oil—despite what White House says

The United States leads the world in oil and gas production, but President Trump’s new national security strategy — the so-called “Trump Corollary” — emphasizes greater US control over the Western Hemisphere, including more influence over South America, which increasingly leads the world in new oil production growth. Almost everything the Trump administration does in South America — from pressuring Venezuela to Argentina’s $20 billion bailout to defending Guyana’s territorial waters — is at least linked to the black gold that is crude oil.

While the White House emphasizes national security concerns about drug trafficking and immigration, bombing boats and killing more than 80 people so far in repeated, legally questionable actions, Venezuela is home to the world’s largest proven oil reserves. A regime change and new laws that open Venezuelan oil to more American and foreign investment could lead to much larger oil flows.

And remember, Trump is a big fan of controlling oil quantities in order to lower prices at the pump – a major policy matter for him – without having to rely on OPEC.

“In the next five years, we will see more oil coming from South America,” said Jorge Leon, head of geopolitical analysis at research firm Rystad Energy. “I think there will be increased American influence in the region to attract foreign and American companies, just like in the 1980s when there were a lot of American players in South America. I would not be surprised if you see a new wave of companies returning there to unlock this enormous oil potential.”

If Trump succeeds and forces Maduro to step down, the U.S. may also see more investment in Venezuelan oil, a heavier crude type that U.S. oil refineries prefer even to U.S. crude, Leon said. luck. However, this is a big “if”. Venezuelan President Nicolas Maduro is likely to resist with all his might. He has already insisted that his country will not become an American “oil colony” and accused Trump of piracy.

Oil is a “piece of the puzzle” in all of Trump’s interventions in Venezuela and the broader continent, but it is not necessarily the main motivating factor, said Francisco Monaldi, director of the Latin American Energy Program at the Baker Institute for Public Policy at Rice University.

“Trump sees himself as being able to control mineral reserves,” Monaldi said.

“It seems to be part of [Trump’s] An idea for some sort of new Monroe Doctrine. “Some call it the Donroe Doctrine,” Monaldi said. “It basically wants the United States to have a dominant role in the region in terms of raw materials and limit the role of geopolitical competitors, like China, which is a challenge.”

Monaldi said the domestic oil business in the United States is maturing and showing signs of stability, and the United States wants more control over global oil outside the Middle East and Russia. Companies like ExxonMobil and Chevron are already helping to grow South American production at a time when the continent’s politics are tilting more to the right — whether coincidentally or not.

“The bottom line is that the region could become more aligned with President Trump,” Monaldi said. “Not long ago, the region was ruled by the left or the hard left, which was very anti-American.”

Intense focus on Venezuela

Home to the world’s largest proven oil reserves but less than 1% of global oil production, Venezuela is arguably the most accomplished country in the world from an oil extraction perspective.

Once a major player producing nearly 4 million barrels of oil per day, Venezuela has fallen from 3.2 million bpd in 2000 to about 960,000 bpd under the authoritarian socialist regimes of Maduro and his predecessor Hugo Chavez, due to a combination of mismanagement, lack of investment, and escalating US sanctions.

With the exception of Iran, no country has gotten under Trump’s skin more than Venezuela in either of Trump’s presidential terms so far. Repeated sanctions and threats have failed to force Maduro from office so far.

While the Trump administration may really be more focused on drugs and immigration, Monaldi said Venezuela and the rich Orinoco oil belt represent a key geopolitical tool.

“Venezuela seems like a very important piece of the puzzle. It is far from the geopolitical areas that are problematic. [in the Eastern Hemisphere]“The oil reserves are there, and the geological risks are very low,” Monaldi said. “The problems in Venezuela are above ground.”

“Venezuela could produce four times or even five times the amount of oil – at least technically. This would require investments in the tens of billions of dollars.”

Starting this fall, the United States has launched more than 20 known strikes against boats in the Venezuelan region, killing more than 80 people. The administration insists, without providing any evidence, that the boats are smuggling drugs. Trump has built a military force in the region, sending the aircraft carrier USS Gerald R. Ford headed to the Caribbean with a group of fighter planes and guided missile destroyers.

On December 10, in a further escalation, the United States seized the sanctioned oil tanker Skipper for allegedly making repeated and illegal shipments of Venezuelan and Iranian oil. The tanker was subject to US sanctions under a different name in 2022 due to its shipments of Iranian crude. The administration threatens to seize more tankers in the future, which could further cripple the Venezuelan economy.

In a new interview with Politico magazine, Trump said that “Maduro’s days are numbered,” but declined to comment on a possible ground invasion of Venezuela.

When White House spokeswoman Anna Kelly was asked about the oil involvement, she said only in a statement that Trump was focused on preventing “narco-terrorists who bring deadly poison” into the United States. She added: “The President will continue to use every element of American power to prevent the flow of drugs into our country.”

Institutional role

In July, Trump granted Chevron a new, restricted license to produce oil in Venezuela. As the country’s only U.S. oil producer — Chevron has operated in Venezuela for a century — Chevron produces about 25% of Venezuela’s crude oil with state oil company PDVSA. However, Venezuela ships about 80% of its oil to China at significant discounts due to US sanctions.

At a conference in Washington, D.C., in November, Chevron Chairman and CEO Mike Wirth said geopolitical conditions were difficult, but Venezuela’s potential was worth the effort. “The kinds of fluctuations you see in places like Venezuela are a challenge. But we are playing a long game. Venezuela is blessed with a lot of geological resources and bounty. We are committed to the people of the country and would like to be there as part of rebuilding Venezuela’s economy in time when conditions change.”

Chevron spokesman Bill Turin added in a statement that its presence in Venezuela “continues to be a stabilizing force for the local economy, the region, and America’s energy security.”

Matt Reid, vice president of geopolitical and energy consultancy Foreign Reports, said much of the focus on Venezuelan oil involves hard-line Republican politicians and Maduro opponents in Venezuela who are calling for greater U.S. military intervention.

“They are trying to convince Trump to jump in with both feet and get rid of Maduro, under the pretext that there are also economic incentives through oil,” Reid said. “They are the ones promoting the idea that American companies will benefit in the long run if they have access to Venezuelan oil resources.”

Reed said Trump certainly wants to get rid of Maduro and unleash Venezuela’s oil potential, but — despite his often erratic whims — he would prefer to do so without a repeat of the 2003 U.S. invasion of Iraq.

“Getting involved in regime change in Venezuela is probably the most ambitious military mission he will be involved in, which is why I don’t think he will overcommit,” Reed said of Trump. “I think what he wants to do is tighten the screws and make Maduro untenable — and make sure everyone understands that maybe the United States and Venezuela can turn the page once he’s out of the picture.”