What’s Really Behind the US–Venezuela Crisis? Oil, Power, and Global Politics

In an unprecedented military operation that has shocked the world, the United States launched large-scale strikes on Venezuela on January 3, 2026, resulting in the capture of President Nicolás Maduro and his wife Cilia Flores. This dramatic intervention has brought global attention to Venezuela’s vast oil reserves and raised critical questions about energy security, international relations, and the future of Latin America’s oil-rich nation. This blog examines the complex factors behind this crisis of Venezuela vs US, focusing on why Venezuelan oil matters so much to the United States and what lies ahead for both nations.

The Main Cause: A Perfect Storm of Factors

The US military action against Venezuela wasn’t triggered by a single cause but rather a culmination of multiple tensions:

Drug Trafficking Allegations: President Trump has repeatedly accused Maduro of running a “narco-state” and leading what he calls “Cartel de Los Soles,” a narco-terror organization. Maduro and his wife now face federal charges in New York related to drug trafficking and working with gangs designated as terrorist organizations. Since September 2025, the US has been attacking vessels allegedly carrying drugs off Venezuela’s coast, resulting in over 100 deaths.

Disputed Elections: Following a July 2024 presidential election that international observers described as fraudulent, Maduro declared victory despite opposition candidate Edmundo González reportedly receiving about 70% of the vote. The US and many other nations refused to recognize Maduro’s legitimacy.

Geopolitical Tensions: Venezuela’s close ties with US adversaries, including Russia, China, Iran, Cuba, and Nicaragua, have been a persistent concern for Washington. According to analysts, these alliances posed what the Trump administration viewed as a threat to regional security and American interests in the Western Hemisphere.

Access to Resources: Venezuelan Ambassador Samuel Moncada articulated what many observers believe is the core issue, stating: “It’s not drugs, it’s not security, it’s not freedom – it is oil, it’s the mines, it’s the land.”

Venezuelan leader Maduro lands in New York after capture by US troops

Venezuela’s Oil Reserves: A Global Giant

Venezuela possesses the largest proven oil reserves in the world, a fact that makes it a crucial player in global energy markets, inluding this Venezuela vs US situation:

The Numbers:

• 303 billion barrels of proven oil reserves as of 2024
• Approximately 20% of the world’s global oil reserves
• More reserves than Saudi Arabia (267 billion barrels) and Iran (209 billion barrels) combined
• Valued at an estimated $17 trillion at current market prices

The Orinoco Belt: The majority of Venezuela’s oil reserves are located in the Orinoco Belt, a vast region stretching across roughly 55,000 square kilometres in the eastern part of the country. This region contains extra-heavy crude oil, which is highly viscous, dense, and challenging to extract.

Historical Production: At its peak in the 1970s, Venezuela produced approximately 3.5 million barrels per day. However, current production has fallen to only about 1 million barrels per day—less than a third of its former capacity.

Current State of Venezuela’s Oil Infrastructure

Venezuela’s oil industry has experienced a dramatic decline over the past two decades:

Infrastructure Crisis:

• Many oil pipelines are over 50 years old
• Oil production has fallen by more than half since 2013
• Critical facilities, including upgraders (needed to process extra-heavy crude), went offline between 2019 and 2021
• Years of underinvestment, mismanagement like loadshedding and stolen equipment, and international sanctions have devastated the industry

Economic Impact: The state-owned oil company, PDVSA (Petróleos de Venezuela, SA), has been crippled by a combination of corruption, brain drain, and lack of technical expertise. Restoring production to even 1990s levels would require investments exceeding $8 billion, with full recovery potentially costing $58 billion.

Historical Context: Under President Hugo Chávez (1999-2013), the government forcefully renegotiated contracts with international oil companies, leading major players like ExxonMobil and ConocoPhillips to leave the country in 2007. This exodus of expertise and capital contributed significantly to the industry’s decline.

Read More: India vs US Tariffs: Clash or Cooperation!

US Oil Reserves and Energy Profile

Understanding America’s own energy position is crucial to understanding why Venezuelan oil matters:

US Strategic Petroleum Reserve (SPR):

• As of December 31, 2024: 393.6 million barrels in the SPR
• Authorized storage capacity: 714 million barrels
• The SPR reached its highest level of 726.6 million barrels on December 27, 2009

US Proven Oil Reserves:

• Approximately 46.4 billion barrels as of year-end 2023
• The US is the world’s largest oil producer, but its reserves are a fraction of Venezuela’s

Oil Type Difference:

• US production is dominated by light, sweet crude from shale formations like the Permian Basin
• This oil is excellent for making gasoline, but limited for other critical products

Why the US Needs Venezuelan Oil

Despite being the world’s largest oil producer, the United States has specific strategic reasons for wanting access to Venezuelan crude:

1. Refinery Compatibility

The key factor is that most US Gulf Coast refineries were specifically built to process heavy, sour crude like Venezuela’s oil. According to Secretary of State Marco Rubio, “Our refineries in the Gulf Coast of the United States are the best in terms of refining the heavy crude.”

2. Product Diversity

While US light, sweet crude is ideal for gasoline production, Venezuelan heavy crude is essential for producing:

• Diesel fuel (in tight global supply)
• Asphalt for road construction
• Industrial fuels for factories
• Heavy equipment fuels
• Other specialized petroleum products

3. Economic Efficiency

According to energy analyst Phil Flynn, “Most US refineries were constructed to process Venezuela’s heavy oil, and they’re significantly more efficient when they’re using Venezuelan oil compared to American oil.” Running these refineries at optimal capacity requires heavy crude imports.

4. Geographic Proximity

Venezuela’s location makes it an ideal supplier to the US compared to other heavy crude sources like Canada or the Middle East. Lower transportation costs and shorter supply chains make Venezuelan oil economically attractive.

5. Market Balance

Access to Venezuelan oil could help stabilize global energy markets and potentially reduce the risk of price spikes and shortages, benefiting American consumers and businesses.

Trump’s Vision for Venezuelan Oil

At a news conference at Mar-a-Lago on January 3, 2026, President Trump laid out his vision for Venezuela’s oil industry:

Key Quotes from Trump:

“We’re going to have our very large United States oil companies — the biggest anywhere in the world — go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country.”

“We are going to run the country until we can do a safe, proper and judicious transition.”

“They were pumping almost nothing by comparison to what they could have been pumping and what could have taken place.”

“We built Venezuela’s oil industry with American talent, drive and skill, and the socialist regime stole it from us.”

Trump also stated that the operation wouldn’t cost the US anything because oil companies would invest in the infrastructure themselves, claiming, “It’s going to make a lot of money.”

On Access to Resources:

When asked what he needs from interim Venezuelan leader Delcy Rodríguez, Trump demanded: “Total access. We need total access. We need access to the oil and to other things in their country that allow us to rebuild their country.”

US Companies’ Response:

Chevron (the only major US oil company currently operating in Venezuela): “Chevron remains focused on the safety and well-being of our employees, as well as the integrity of our assets. We continue to operate in full compliance with all relevant laws and regulations.”

ConocoPhillips: “It would be premature to speculate on any future business activities or investments.”

ExxonMobil has not yet commented publicly, though the company is owed over $1 billion by Venezuela from previous expropriations.

What the US Plans to Do with Venezuelan Oil

The Trump administration’s stated plan involves several key elements:

1. Infrastructure Reconstruction

Major US oil companies would invest billions to:

• Repair ageing pipelines (some over 50 years old)
• Restore upgraders needed to process extra-heavy crude
• Modernise drilling and extraction equipment
• Rebuild refining capacity

2. Production Ramp-Up

Energy analysts suggest that with proper investment and political stability, Venezuela could:

• Reach 2 million barrels per day production within 1-2 years
• Eventually restore production to the previous peak levels of 3-3.5 million barrels per day
• This would require long-term investment and sustained political stability

3. Market Distribution

Venezuelan oil would likely be directed to:

• US Gulf Coast refineries (primary destination)
• Global markets, including India and China
• Potentially European markets if political conditions stabilize

4. Revenue Generation

The plan envisions using oil revenues to:

• Stabilize Venezuela’s economy
• Fund infrastructure development
• Compensate US companies for past expropriations (ConocoPhillips is owed over $10 billion, ExxonMobil over $1 billion)
• Generate profits for US energy companies

Challenges and Uncertainties Ahead

Despite Trump’s optimistic vision, significant obstacles remain:

Political Instability: The capture of Maduro has left Venezuela in political limbo, with uncertainty about who truly controls the country and whether armed resistance will emerge.

Technical Complexity: Venezuelan extra-heavy crude requires specialized expertise that few companies possess. Only Chevron currently has the operational knowledge and infrastructure in place.

Investment Climate: With oil prices relatively low in 2026 (around $57-60 per barrel), the massive investment required may not be economically attractive to energy companies.

International Reaction: Russia, Iran, China, and Cuba have condemned the US action, raising questions about potential international complications.

Legal Questions: Congressional Democrats have criticized the operation as unauthorized, with Senator Tim Kaine stating, “Maduro is terrible. But Trump put American servicemembers at risk with this unauthorized attack.”

Timeline: Energy experts caution that even under optimal conditions, restoring Venezuela’s oil industry will take years, not months, and requires sustained political stability.

What Happens Next?

The US intervention in Venezuela represents a bold—and controversial—attempt to reshape both Venezuela’s political future and the global energy landscape. At its core lies a fundamental economic reality: Venezuela possesses the world’s largest oil reserves, and the United States has refineries specifically designed to process that oil efficiently.

While President Trump frames the operation in terms of combating drug trafficking and restoring democracy, the central role of oil cannot be ignored. The success of this intervention will depend on numerous factors including political stability, corporate willingness to invest, international reactions, and the ability to rebuild a devastated infrastructure.

For global observers, this situation raises profound questions about sovereignty, intervention, and the role of natural resources in international relations. As this unprecedented situation continues to unfold, the world watches to see whether Trump’s vision of a restored Venezuelan oil industry will materialize, or whether the complexities of rebuilding a broken nation will prove too formidable even for the world’s largest oil companies.

What remains clear is that Venezuela’s oil—its blessing and its curse—will continue to play a defining role in its relationship with the United States and its place in the global economy for years to come.