Trump’s Cargo Cult Imperialism in Venezuela
When the Bush administration was planning and selling its war of aggression against Iraq in 2002, a common argument made by anti-war activists was that the whole thing was about oil. By toppling Saddam Hussein’s government, American oil companies could swoop in and make a profit selling cheap oil to Americans so they could keep driving huge SUVs to their suburban McMansions.
This didn’t make all that much sense—for one thing, the war and occupation ended up costing on the order of $3 trillion, and Hussein would have been more than willing to just sell us the oil for a lot less than that—but for an administration whose two top leaders were both former oilmen, it had a surface plausibility.
Donald Trump has done Bush one better: He simply said outright that his military attack on Venezuela, in which commandos kidnapped President Nicolás Maduro and transported him to Manhattan to be put on trial, was about oil. “We’re going to have our very large United States oil companies … start making money for the country,” Trump said. Later, he added, “We’re going to be taking out a tremendous amount of wealth out of the ground, and that wealth is going to the people of Venezuela … it goes also to the United States of America in the form of reimbursement for the damages caused by that country.” Secretary of State Marco Rubio, the administration’s architect of Venezuelan regime change, boasted that American refineries were perfectly ready to process the plunder.
There’s just one problem: Stealing Venezuela’s oil makes no sense, even—indeed, especially—from the standpoint of American oil companies.
The most important context here is that while America was a large net importer of petroleum products in the early 2000s, today it is a major producer. Back in early 2003, the U.S. was importing about 10,000 barrels each day, and that figure had been on an upward trajectory since the early 1980s—lending credence to the oil argument with respect to Iraq. But since the advent of fracking technology, America has become the largest producer of oil and gas in the world, and a large net petroleum exporter, to the tune of about 3,300 barrels per day as of October last year.
The price of oil, about $58 at time of writing, is already dangerously low for American fracking companies, whose investments typically pencil out with prices at $60 per barrel or above. More oil on global markets means those prices would drop even lower, crushing the economics of drilling even further. The U.S. oil industry needs Trump to swoop in and add another few million barrels a day of production like it needs a hole in the head.
When oil executives have been asked point-blank about their interest in Venezuela, they were notably noncommittal. “We’d have to see what the economics look like,” said Darren Woods, CEO of ExxonMobil. “It would be premature to speculate on any future business activities or investments,” a ConocoPhillips spokesperson added.
The characteristics of Venezuelan oil also make this quite unlikely. Its reserves—which were likely overstated by Maduro and his predecessor Hugo Chávez, by the way—are very viscous and sulfur-laden; much like Canadian tar sands, the product is so gloopy that you have to cut it with some kind of solvent to get it to flow in a pipe. This makes Venezuelan crude lucrative for refiners but not so much for oil companies to pull from the ground. In short, it’s expensive to drill, transport, and refine, just like the fracked oil that is barely turning a profit right now.
Moreover, Venezuela’s oil infrastructure is also in ruins, thanks to decades of chronic mismanagement and American sanctions. Industry experts report that it would take perhaps a decade of heavy investment totaling $100 billion to bring it back to where it was in the early ’90s. Now, some American refineries were built to handle Venezuelan oil, but that capacity is now partly occupied by Canadian crude, and again, refining more would come at the expense of the industry as a whole.
Over the long term, the looming collapse in oil demand makes a yearslong investment in Venezuelan oil rigs and pipelines highly risky. While the EV transition has partly stalled out in America thanks to Trump, much of the rest of the world is charging ahead. Fully one-quarter of all cars sold in the world last year were EVs. In China, the largest single car market in the world, more than half of cars sold were EVs in 2025—a nearly tenfold increase in just five years.
There’s a similar story happening all over the world. Nations without oil reserves, and developing nations in general, are eager to cast off the yoke of fuel imports. (China might be making most of the solar panels and EVs, but that’s a one-off purchase, rather than paying the Big Oil tax one pump at a time virtually endlessly.) From a baseline of basically zero in 2020, Singapore has surged to a 45 percent EV share of new cars in 2025; Vietnam to 38 percent; Uruguay to 27 percent; and Thailand to 21 percent. Africa is moving in this direction as well, with Ethiopia leading the way.
Fuel for cars and trucks makes up the overwhelming majority of oil use. EVs have already taken a large bite out of oil demand—on the order of a million barrels a day—and that is going to increase very quickly. It follows that any investment into repairing Venezuela’s rotten oil infrastructure is highly likely to be worthless by the time it’s finished a decade hence.
Now, I don’t doubt that oil companies—and Trump-aligned business titans in general—will attempt to profit from this move. They can monetize the “proven” reserves in Venezuela by touting it as a potential revenue generator. Some refining companies, particularly Chevron, which has been operating in Venezuela for around a century, might make a bit of money out of it. Some oil executives, who tend to be in the class of rich people boiling their brains in right-wing propaganda, might even have supported the attack. But the American oil sector as a whole will not benefit, and neither will the American people. If I had to guess, very little additional oil will get drilled at all.
If there’s one consistent theme in the history of Donald Trump’s business career, it’s that he sucks at business. He’s a stupid, domineering brute who compulsively rips off everyone he interacts with, with the possible exception of Jeffrey Epstein. Trump’s career in casinos and real estate ended in repeated bankruptcy. He didn’t even maximize the profit from the real estate empire he inherited from his father. So it comes as no surprise that he thinks about imperialist conquest like some 14th-century steppe warlord. It’s been more than a century since wars for plunder made any economic sense, but for Trump to realize that, he would have to be capable of rational thought.
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