US President Trump showed on Saturday what experts have suspected for some time: he is obsessed with Venezuelan oil and that is (partly) the source of his aggression against Venezuela. All this time he was not (only) concerned with drugs and migration, as he himself had previously suggested. Trump wants to dominate the untapped gigantic wealth that Venezuela literally sits on top of. The largest oil reserves in the world.
After Trump had Venezuelan President Nicolás Maduro and his wife kidnapped from their… safe househe told journalists: “We are going to call in our very large American oil companies, the largest in the world. They will invest billions of dollars, restore the badly damaged oil infrastructure and thus make money for the country.” And: “It won’t cost us anything, because the money coming out of the ground is very significant. We will be reimbursed for everything we spend.”
Four questions about Trump’s obsession with Venezuelan oil.
1How much oil does Venezuela have and how important is that oil for the global economy?
The country owns 17 percent of the world’s (known) reserves. With an estimated more than 300 billion barrels (a barrel is 159 liters), there is much more oil in the Venezuelan soil than in the American one, with about 45 billion barrels. Even oil country Saudi Arabia, with approximately 270 billion barrels, has less reserves than Venezuela.
Despite Venezuela’s enormous potential, the country will produce less than 1 million barrels per day according to OPEC figures for 2024. In the US it is 13 million and Saudi Arabia 9 million.
Mismanagement at the Venezuelan state oil company PDVSA, severely neglected oil infrastructure and international sanctions against the Venezuelan government that cause economic damage: these are the causes of the significant underproduction.
2Why does Trump want to dominate and boost Venezuela?
Trump believes that the US has every right to the oil. “We built the Venezuelan oil industry and the previous socialist regime stole it from us,” Trump said in a press conference on Saturday, referring to the Venezuelans. “A huge industry was taken from us as if we were babies and we did nothing about it.”
Trump is referring to the nationalization of the Venezuelan oil industry in 1976 and again in 2007, after which the oil from American oil giants such as Exxon Mobile was seized. “Trump believes that things have been taken from him,” says off-duty Vice Admiral Ben Bekkering, affiliated with the Clingendael Institute, “he wants it back now.”
American oil companies have long wanted compensation for the assets that the Venezuelan regime has taken. As far as he is concerned, the money that Trump wants to raise with Venezuelan oil is not just for the Venezuelan people, but o.
“The card that Trump is now playing is that the Venezuelan oil economy is doing badly, the Americans have been pushed out,” says Bekkering. Before nationalization, Venezuela had a production peak of 3.5 million barrels per day, more than 2.5 million more than now. Trump says that the US should now get what is underground.
Plus: in Trump’s world. He clings to a world economy that runs on fossil fuels and is disgusted by all attempts that countries make for an economy based on climate-friendly renewable energy.
Trump has been trying to strengthen relations with oil countries for some time. Bekkering: “In his National Security Strategy he indicates that he will do more business with Russia, for example.” .
The reconstruction of Venezuela as an oil country can create opportunities for American oil companies that are not yet active there. Only the American oil giant Chevron is subject to sanctions. According to the AP news agency, it produces approximately 250,000 barrels per day.
Then it would too type oil could still be beneficial for the US. Venezuelan oil is syrupy and thick. The refineries on the Gulf Coast in the US were built to process precisely that type of heavy oil, a market analyst told the American news site CNN. As soon as countries extract more heavy oil from Venezuela, they will need less from competitor Russia. . So: more power for Trump.
In the background of Saturday’s mission, Bekkering also suspects that Venezuela is an important oil supplier for Cuba. “US Secretary Marco Rubio (Foreign Affairs) is strongly opposed to Cuba.”
3More oil on the market often means a lower oil price. Isn’t that disheartening for American oil companies?
It has been criticized for some time now ‘Drill, baby drill‘ by Trump. More drilling means more supply and then the price per barrel can drop. If it drops too far, it will no longer be lucrative for oil companies to drill. On the other hand, geopolitical unrest could lead to higher oil prices.
It is still unclear what will happen to oil prices a day after Maduro’s imprisonment. But when the market opens again on Sunday night, lead. It will take years and billions to refurbish Venezuela’s oil infrastructure before production can be significantly increased, wrote among others The New York Times.
4What does the American investment in Venezuelan oil look like in concrete terms?
So far, American oil companies have remained remarkably silent in international media. A Chevron spokesperson was also reluctant, but stated opposite The New York Times that the company complies with all relevant laws and regulations. It is still completely unclear whether and to what extent oil companies can and want to implement Trump’s promise. Those companies may be waiting for stable governance in Venezuela.
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