When, sometime last week, the U.S. President announced the “capture” of Nicolás Maduro Moros, until 3 January, Venezuela’s resident dictator, much confusion reigned. The “Why?” of the American demarche was the prickliest. Surely, it could not have been because going six years now, the US has had a federal court indictment of Maduro for “narcoterrorism and conspiracy to import cocaine to the United States”? Remember that the same US recently pardoned Juan Orlando Hernández Alvarado, a former president of Honduras, releasing him from a 45-year prison sentence for importing cocaine into the US
Could the US have acted, instead, to halt Mr Maduro’s ceaseless violation of Venezuelans’ rights and distaste for democratic outcomes? The objection to this as probable casus belli is not just that democracy and human rights advocacy are not the strongest suits of the Trump administration. It does not hurt to point out that by keeping the rump of the Maduro government intact in Venezuela, not even “regime change” was on the Trump to-do list. We also have Marco Rubio, the US Secretary of State’s, mid-2025 internal memo to US diplomats worldwide for guidance. In the memo, Mr Rubio bade U.S. diplomats against publicly commenting on the fairness or integrity of foreign elections unless there is a “clear and compelling” US foreign policy interest. The new instructions also required election messaging to be brief and not opine on democratic values — a notable departure from longstanding US diplomatic practice of promoting free and fair elections.
So, why did the US “capture” Mr Maduro? As a friend put it, the whiff of crude oil politics quickly settled on the search to make sense of the US’ action. Mr. Trump likewise nudged enquiry in this direction. And in a middling frontier economy with crude oil export as its main route for commercial exchange with the global economy the oil explanation resonated within our echo chambers. “Who is next after Venezuela?” is the new unasked question.
Yet, the oil explanation for the US’ recent activity in Venezuela is wrong. Mr Maduro would have given an arm and a leg, plus all of Venezuela’s oil assets to the Trump administration (to Trump himself or his estate, even), if that would have guaranteed his continued stay in office. Besides, the United States is the world’s largest crude oil producer by a significant margin. And despite lifting restrictions on oil exploration in the country, in order to have oil companies “drill, baby drill”, not much additional capacity has come on stream in the country.
In other words, the US clearly does not need Venezuelan oil. No. It does after a fashion. US refineries were built to process Venezuela’s heavy sour crude variety and not the light sweet crude that its shale deposits produce. So, there is a case for US interest in Venezuelan exports of crude oil. And with proven reserves of 300 billion barrels, it is the world’s most oil-rich place. Today, though, a combination of inept policies and sanctions has Petróleos de Venezuela, S.A. (PDVSA), Venezuela’s state-owned oil and gas company, producing about a million barrels per day (mbpd).
In order, however, to return Venezuelan crude oil output to the 2.5 million barrels per day that was its halcyon state, current estimates are of new investments in the country’s oil infrastructure of close to US$12 billion. Ignore, if you can, the legal impediments to doing business in and with a Bolivarian Revolutionary Republic, and the state of global oil play stares you in the face. The demand-supply imbalance in the global oil markets favours buyers. Indeed, expectations are of prices reaching as low as US$50 per barrel, this year and next.
There is evidently no market into which investment of US$12 billion into Venezuela’s oil and gas industry can sell its output. Much of the glut in global crude oil supply is from the activities of US companies in newly discovered oil fields in Brazil and Guyana. Here, the story gets more interesting. Production cost in Guyana is estimated at US$7 per barrel, whereas in Venezuela, it is US$80 per barrel, one consequence of its heavy, sulphur and other minerals-laden reserves – way above the current market price for a barrel of oil.
A further big source of concern is how China plays in this game. America’s new global rival has a large primary resource-use appetite. And it is one of the main offtakers of Venezuela’s crude oil production. Is it possible, then, that the US’ bid for Venezuelan oil assets is a dog-in-a-manger manoeuvre – designed to deny China access to a critical power source? This makes sense only if you ignore the fact that China currently earns more from the export of renewable-energy-related products and technologies than the US earns from fossil fuel exports. Put this way, even if the US’ recent excursion into Venezuela was about crude oil, the Trump administration is fighting yesterday’s war. If the politics of crude oil would not do as explanation for the US armed forces’ daring sortie into Venezuela to “capture” Mr Maduro, what does? The biggest pothole ahead of anyone trying to make sense of Mr Donald J. Trump’s policies as the US president is to assume strategic intent, where impulse will do just fine.
Uddin Ifeanyi, journalist manqué and retired civil servant, can be reached @IfeanyiUddin.
