The geopolitical shock this week came from Venezuela. In a Jan. 3 overnight operation, the U.S. military captured President Nicolás Maduro in Caracas, ending his rule and pushing the country into a U.S.-backed transition. President Donald Trump framed the move as part of a campaign against drug trafficking, but made clear that Venezuela’s oil industry, long crippled by sanctions and mismanagement, sits at the center of the strategy.
Venezuela holds the world’s largest proven crude reserves, yet production has collapsed from roughly 3.5 million barrels per day in the 1990s to about 800,000 today. The U.S. has since imposed an oil blockade, seized tankers, and announced that tens of millions of barrels of Venezuelan crude will be sold by the U.S., with proceeds held in U.S.-controlled accounts and used to purchase American-made goods. Markets responded with lower oil prices, underscoring the irony that this supply shift is landing in an already oversupplied global market.
That backdrop set up a White House meeting with major energy players, including Exxon Mobil, ConocoPhillips, Shell, and Chevron. The Administration wants U.S. companies to invest billions to rebuild Venezuela’s energy sector, but skepticism runs deep after past nationalizations and billions in unpaid arbitration claims. Chevron, the only U.S. major still operating locally, is the near-term anchor, while broader reentry could take years and massive capital.
The takeaway is about precedent as much as oil. The U.S. has removed a sitting head of state without a formal declaration of war, asserted control over another country’s resource revenues, and tied reconstruction to political compliance. Whether this becomes a durable model or a cautionary tale will depend.
