Donald Trump said on Saturday that the U.S. would “run” Venezuela and seize its oil wealth as reimbursement for damages, echoing ancient patterns of U.S. involvement in oil-rich nations.
Venezuela and the Echoes of Iraq
A look at the historical precedents and potential challenges of U.S. involvement in Venezuela’s oil sector.
- Trump’s comments signal a potential shift toward direct intervention in Venezuela’s oil industry.
- The U.S. has a history of involvement in the oil sectors of nations following regime change,notably in Iraq and Libya.
- Ramping up Venezuelan oil production faces significant hurdles, including underinvestment and a skilled labor shortage.
- despite being the world’s largest oil producer, the U.S. is focused on achieving “Energy Dominance” and sees Venezuela as a potential asset.
Watching Trump’s press conference at Mar-a-Lago on Saturday, the prospect of the U.S. directly controlling another nation’s oil resources brought to mind the immediate aftermath of the 2003 U.S. invasion of Iraq. At that time,I spent several weeks traveling around Iraq’s oil fields,some still containing unexploded ordnance,speaking with members of the U.S.-led Task Force Rio-whose name stood for “Restore Iraqi Oil”-and local workers. I also interviewed officials from the Iraqi oil ministry in Baghdad.
A Familiar Pattern?
Venezuela isn’t Iraq, and there hasn’t been a U.S. occupation-though Trump remarked, “We’re not afraid of boots on the ground.” Nonetheless, this marks the second time in twenty-three years the United States has deposed the authoritarian leader of an oil-rich nation-the third if considering the 2011 NATO strikes on Libya, which contributed to the fall of Muammar Gaddafi. History offers valuable lessons.
Unlike Trump, who openly embraces what some might call petro-imperialism, members of the Bush Administration maintained that their push for regime change in iraq wasn’t connected to hydrocarbons. Donald Rumsfeld famously said it had “literally nothing to do with oil.” They also asserted that the postwar reconstruction of iraq’s oil industry was solely to benefit the country. At an oil refinery in Basra, I attended a meeting led by the American brigadier general in charge of Task Force Rio. an aide handed out a document stating, “Iraqis are responsible for the energy sector.”
Venezuela’s oil industry, once the engine of its economy, is now a shadow of its former self. Production reached approximately one million barrels a day, a third of its output from a quarter-century ago. Trump stated on Saturday that U.S. oil companies would “go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country.” However, the situation is far from simple.
One energy analyst told the Financial Times that doubling Venezuela’s oil output would require more than a hundred billion dollars. The recent dip in crude prices,falling below sixty dollars and reaching a four-year low,also presents a challenge. Currently, Chevron is the only major U.S. oil company operating in Venezuela. Before Christmas, reports emerged that the Administration had contacted other U.S. firms, such as ExxonMobil and ConocoPhillips, to gauge their interest in returning to Venezuela, where they operated before the government of Hugo Chávez, Nicolás Maduro’s predecessor, seized their assets. Lawsuits related to those seizures are ongoing. Politico reported that initial responses were largely negative. “Frankly, there’s not a lot of interest from the industry, in light of lower oil prices and more attractive fields globally,” one source said.
