Venezuelan President Nicolas Maduro said the real reason for the large US military presence in the Caribbean is oil: his country has the world's largest proven reserves.
The US State Department denies this, insisting that the air strikes on the boats that killed more than 80 people and the large troop deployment off the coast of South America were part of a campaign against drug trafficking.
In any case, Donald Trump appears committed to regime change in Venezuela, a country whose main allies are China, Russia and Iran, and which has suffered a deep economic collapse that has caused the region's largest refugee crisis, writes The Guardian.
But Trump is happy to reach understanding with authoritarian leaders in other countries, and air strikes on small ships in the Caribbean are unlikely to have much impact on the flow of drugs, much of which enters the country through Mexico, leading the US President's critics to conclude that there must be another motive.
Colombia’s leftist President Gustavo Petro, himself in an increasingly bitter feud with Trump, has called the three-month campaign against Caracas “oil negotiations,” arguing that Trump is “not interested in democratizing Venezuela, let alone the drug trade.”
But Western analysts familiar with how Venezuela's oil industry operates say things are not that simple.
“I think oil is probably one of the reasons for the military buildup, but not the main reason,” said Francisco Monaldi, director of the Latin American energy program at the Baker Institute of Public Policy at Rice University in Houston.
First of all, “Venezuela is currently a very small player,” he argues, arguing that although the country contains nearly a fifth of the world's known reserves, it accounts for less than 1% of global output. Most of Venezuela's reserves are high-sulfur oil, which is harder and more expensive to extract. Meanwhile, the country's oil industry has been weakened by corruption, mismanagement and lack of investment for decades.
Monaldi estimates that current production of just under 1 million barrels per day could increase to 4 million or even 5 million barrels per day, but this would require about $100 billion in investment and at least 10 years.
After oil workers' strikes in the early 2000s, Maduro's predecessor and advisor, Hugo Chavez, fired large numbers of workers at state-owned Petróleos de Venezuela Sociedad Anónima (PDVSA) and increased state control of the company. His government then ordered that PDVSA must own at least 51% of the shares and have operational control over all explored fields, eliminating multinational companies that had long operated in the country, such as ConocoPhillips and Exxon-Mobil.
Output then dropped sharply, especially after the US imposed sanctions during Trump's first term banning Venezuelan oil imports. Joe Biden eased those restrictions in hopes that Maduro would allow a transition to democracy, but after last year's election, which Maduro won, Trump reinstated sanctions
However, even during sanctions, US oil giant Chevron never completely suspended operations in Venezuela but maintained them, albeit at a sharply reduced level. Trump revoked Chevron's license but reversed course in July, ordering that royalties not go to Maduro's government but be used to cover operating costs and repay the Venezuelan government's longstanding debt to the American company.
With Trump's recent easing of restrictions, Chevron imports between 150,000 and 160,000 barrels per day into the US.
“I believe the main beneficiary of the political changes in Venezuela will be Chevron,” said Jose Ignacio Hernandez, a lawyer and Venezuelan oil industry researcher at the consulting firm Aurora Macro Strategies.
But Hernandez, who was on Juan Guaido's team when the opposition leader declared himself interim president in 2019, also rejected the idea that oil was the main focus of the US election campaign.
He added: “Venezuela's oil industry is destroyed… In the short term, this is an unattractive market, especially for a country like the US, which already has the largest oil output in the world.”
Hernandez pointed to recent reports that in negotiations with US officials, Maduro offered US companies access to all current and future oil and gold projects.
“If Trump wants an exclusive deal on Venezuelan oil, he will accept Maduro's offer,” Hernandez said.
Monaldi said that even if there is a regime change and a US-backed candidate comes to power, the final decision on whether to invest in Venezuelan oil will ultimately be made by the companies, which will primarily affect political and economic stability.
“Venezuela has huge resources, developed infrastructure and already exploited deposits; no one goes there and explores them from scratch… But at the same time, there are a lot of potential obstacles: political risks, the country's history, the fact that oil is less valuable,” he said. “So the obstacles are mainly on the surface.”
