Why Trump argues the US deserves Venezuela’s oil

WASHINGTON – The US has ratcheted up pressure on the government of Venezuela with a series of measures designed to stifle the country’s vital oil exports, including

a blockade on sanctioned oil tankers

going to and from the country. 

US President Donald Trump and top administration officials say their main objectives are to stem the flow of illegal narcotics from the country and force President Nicolás Maduro from power.

But for decades, US companies dominated Venezuelan oil production before most saw their operations expropriated in the early 2000s.

Mr Trump and White House Deputy Chief of Staff Stephen Miller have said that this history motivates the US’s increasing aggression.

Venezuelan officials say the Americans’ intentions are unambiguous: to seize Venezuela’s oil reserves, the world’s largest. 

Here’s what’s important to know about Venezuela’s oil industry as the US operation plays out. 

What actions has the US taken to limit Venezuela’s oil exports? 

US forces intercepted and seized an oil tanker off the coast of Venezuela on Dec 10.

The vessel purportedly sailed under the Guyana flag, but the country’s Maritime Administration has denied any connection with the tanker.

The crude carrier was sanctioned by the US in 2022 for supporting Iranian oil exports.

The White House said the US intends to keep the oil contained in the seized tanker.

Washington also imposed new sanctions on six ships that transport Venezuela’s oil, causing tankers to U-turn away from the Latin American nation.

In total, the US has sanctioned more than 100 tankers for their involvement in the Venezuelan oil trade or under the Specially Designated Global Terrorist classification. 

Mr Trump later announced the blockade of sanctioned oil tankers. Oil exports are Venezuela’s main source of revenue. 

In addition to the measures to limit the country’s oil exports, the US has positioned warships, aircraft and troops near Venezuela and conducted a series of

air attacks on small boats in the region

that American officials allege were operated by drug cartels.

The attacks have killed dozens of people. Mr Trump has suggested the Pentagon may next conduct strikes on land. 

What’s the impact of the US’ recent actions? 

Venezuela has shipped about 630,000 barrels of crude on average per day in 2025, according to vessel tracking data compiled by Bloomberg.

The blockade is likely to directly affect about 500,000 barrels a day from the South American country, Bloomberg News reported.

The high risk of seizure means tanker operators are unlikely to test US resolve and risk losing a vessel, Bloomberg Economics wrote in a note. 

The country’s crude production could soon be disrupted by a shortage of imported naphtha, a chemical that’s used to turn sludge-like Venezuelan oil into something fluid enough to be commercially viable.

A tanker carrying naphtha on its way to Venezuela turned back after the seizure of the tanker carrying crude from the country. 

Is the US likely to seize Venezuelan oil assets?

“The true reasons for the aggression against Venezuela have finally been revealed,” Venezuela’s government said in a statement after the US seizure of the oil tanker. “It was always about our natural resources, our oil.” 

The Trump administration has not outright suggested the US will seize Venezuelan oil assets.

US officials maintain that the current military campaign in the Caribbean aims to disrupt narcotics trafficking in the region.

The administration says that seizing sanctioned tankers and penalising oil shippers cuts off revenue streams that fund drug-trafficking groups.

Mr Trump has accused Mr Maduro of orchestrating the Venezuelan drug trade from the highest level of government and said the leader’s “days are numbered”.

But Mr Trump has also made his desire for Venezuelan oil clear.

He said that the blockade of sanctioned oil tankers going to and from the country would remain “until such time as they return to the United States all of the oil, land, and other assets that they stole from us”.

He did not clarify what land and “other assets” he was referring to.

In a social media post, Mr Miller also characterised the expropriations as an injustice against the US.

“American sweat, ingenuity and toil created the oil industry in Venezuela,” wrote. “Its tyrannical expropriation was the largest recorded theft of American wealth and property.”

And in a 2023 speech, Mr Trump was even more pointed about his designs on the country’s oil.

“When I left, Venezuela was ready to collapse,” he said, referring to the end of his first term in the White House. “We would have taken it over, we would have gotten all that oil, it would have been right next door.”

What condition is Venezuela’s oil industry in today?

Crude production in Venezuela has plunged more than 70 per cent since its peak in the late 1990s, when it pumped over 3.2 million barrels a day.

Venezuela is now only in 21st place among world producers; its production is poised to be overtaken in the coming years by neighbouring rising star Guyana, as well as Argentina, which has historically been a minor producer. 

Despite the sector’s condition, oil exports are still Venezuela’s main income generator – though Mr Maduro has focused on diversifying its economy in the last few years.

At least 95 per cent of the country’s overseas revenue comes from oil sales.

What caused Venezuela’s oil industry to deteriorate so much?

Venezuela’s oil collapse traces back to the early 2000s, when Mr Hugo Chavez’s socialist revolution brought the industry under tighter state control, driving out foreign investment and entrenching corruption and mismanagement.

The local drilling operations of major western companies, including ConocoPhillips and ExxonMobil, were expropriated after a legal overhaul made Venezuela’s state oil company, Petroleos de Venezuela SA (PDVSA), a majority shareholder in their ventures.

Others, including TotalEnergies, left the country voluntarily. 

Mr Chavez’s reforms included the dismantling of PDVSA’s meritocracy system and over-staffing the company with party loyalists.

A string of accidents plaguing pipelines and oil facilities ensued, including a 2012 explosion at the Cardon refinery complex, one of the largest in the world, causing production to crater and forcing the OPEC nation to import fuel for its needs.

Though crude oil prices spiked to more than US$100 in the mid 2000s, the industry was further rocked by money laundering cases and international indictments of officials. 

There is also the role of US pressure.

Over 100 years of US involvement in the country’s oil industry made Venezuela one of Washington’s strongest regional allies.

But the US imposed financial sanctions on PDVSA in 2017 and operational sanctions in 2019. The sanctions bar most oil trade and financing with PDVSA while permitting a few licensed exceptions.

The restrictions have further deteriorated PDSVA’s facilities, which are highly dependent on US technology the company is now banned from importing. 

Are there any foreign oil companies still operating there?

Yes. Houston-based oil major Chevron Corp, which holds a US licence permitting limited joint operations with PDVSA to produce oil and ship it to US and Gulf Coast refineries, is the last American company still operating after the departures of other majors, including Conoco, Exxon, Total, Shell PLC and Equinor ASA.

Spain’s Repsol, Italy’s Eni SpA and France’s Maurel et Prom SA are also present and partner in oil and gas ventures with PDVSA. 

US sanctions have discouraged Venezuela’s longtime political allies Russia and China from expanding their partnerships with PDVSA.

Russian state oil producer Rosneft transferred its assets in the country to an alternate firm that was not under sanctions – a legal workaround – and China’s state-owned CNPC has kept a minimal presence in the country in recent years.

What nations are the biggest buyers of Venezuelan crude?

China is by far the largest buyer of Venezuelan crude. Venezuela exports oil to the country with so-called ghost ships that disguise the oil’s origins to avoid sanctions.

China buys Venezuelan oil via independent refiners, known as teapots, mostly clustered in China’s Shandong province. 

In addition, Venezuela’s heavy grades satisfy specific demand for thick “asphalt” crude in the US, where some refineries are tailored to process its oil. 

Will oil prices soar if the US attacks Venezuela?

Probably not. “Isolated attacks to drug trafficking assets such as airstrips or laboratories would have minimal impact on prices,” said Mr Francisco Monaldi, the director of Latin American energy policy at Rice University’s Baker Institute for Public Policy. “The market would quickly absorb it.”

This likely absorption is due to Venezuela’s minimal contribution to the world market – it accounts for less than 1 per cent of the world’s output – and a looming worldwide crude glut anticipated by analysts. BLOOMBERG