Terry Lynn Karl
US President Donald Trump’s ongoing efforts to control Venezuela’s oil rest on the assumption that the US can successfully “run” a country twice the size of Iraq. Rather than projecting strength abroad, however, this military overreach reveals the growing vulnerability of a president whose once-firm grip on American politics is steadily weakening. Against this backdrop, the capture of Venezuelan President Nicolás Maduro signals the beginning of a shift toward a more militarised global energy market. It also lays bare the consequences of deliberately destabilising an oil-dependent economy. Far from resolving Venezuela’s ongoing crisis, Trump’s actions threaten to make it far worse. Regime change in Venezuela is unlikely to end with a clear “Mission Accomplished” moment. Iraq alone required at least nine years of sustained US involvement that plunged the country into a civil war, claiming the lives of more than 100,000 Iraqi civilians and costing American taxpayers roughly $2 trillion – an expense the US can hardly afford today. This conflict would also unfold much closer to home, less than 965 km from Puerto Rico. Trump’s intervention raises two critical questions: Who will govern Venezuela? And who will benefit, at least in the short to medium term, from its oil wealth? In petrostates, these questions are inseparable, as the survival of their regimes – whether democratic or authoritarian – depends on their ability to capture profits generated by oil exports and distribute them to key constituencies.
The current Venezuelan crisis sets several troubling foreign-policy precedents. Most notably, it is the first US military intervention to dispense entirely with humanitarian and security justifications in favour of an explicit resource grab. It is also the first US military incursion into mainland South America. If past interventions in Central America and the Caribbean are any guide, it will likely result in the emergence of a criminal regime and new waves of mass migration. As with other resource-rich countries like Iraq, Libya, and Afghanistan, vast oil reserves will not protect Venezuela from a similar fate. Maduro’s removal has left Venezuela with no good options. Its divided op position may seek a power-sharing arrangement or elections, but a civilian government led by the Nobel Peace Prize laureate María Corina Machado is unlikely to survive for long. That is why the Trump administration may seek regime continuity through a negotiated settlement with the most powerful elements of the Chavismo coalition. Such an arrangement would leave the armed forces, security services, and civilian militias intact. Senior military officers, handsomely rewarded for preserving the status quo, would likely remain deeply embedded in key sectors such as construction, food distribution, and petroleum. A second, more dangerous scenario is that Maduro’s removal creates a power vacuum, fueling political and military fragmentation and triggering territorial struggles among competing armed groups and criminal organisations.
A violent struggle over territory and illicit markets could transform Venezuela from a corruption-plagued but relatively stable country into a fractured battleground resembling contemporary Libya. With its jungles, mountains, dense urban centers, and porous borders, Venezuela is particularly well suited to guerrilla warfare. Political fragmentation and prolonged fighting would turn the country into a center of regional instability, perhaps drawing the US into another “forever war” that air and naval forces would be unable to contain. And the allure of gaining control of Venezuela’s oil reserves would probably keep more armed groups in the fight longer. These reserves – larger than Saudi Arabia’s and more than five times those of the US – represent enormous potential, especially for a relatively small economy with a large and dispersed population. But the operative word is potential. Even during its earlier democratic period, Venezuela’s oil sector was crippled by chronic inefficiencies.
Since 1998, production has collapsed by 75%, owing to a toxic mix of low oil prices, US sanctions, corruption, and economic mismanagement. Who, then, will benefit from what’s left of Venezuela’s oil industry? Trump has announced that Venezuela will transfer up to 50 million barrels of oil to the US, and that the revenues will remain under his personal control. He has also urged major US oil companies to enter – or re-enter – the country, promising to reimburse them for the billions of dollars required to repair its broken infrastructure. In his telling, these investments would allow Venezuela to return to major-exporter status within 18 months. But this timeline is pure fantasy, since rebuilding Venezuela’s oil industry would require an estimated $100 billion in investment over a period of 7-10 years. As ExxonMobil CEO Darren Woods put it (much to Trump’s chagrin), high levels of economic and legal uncertainty make the Venezuelan market effectively “uninvestable.” Herein lies the petrostate dilemma.
Global oversupply, low oil prices, and a shortage of investable capital mean that Trump’s approach poses an existential risk to any Venezuelan government. Even without Maduro, the Chavista coalition remains bound together by access to oil rents, criminal networks, patronage systems, the threat of repression, and the emigration of nearly eight million potential dissidents. Given that Chavismo’s ideological core is oil nationalism, Trump’s rhetoric could unite Venezuelans against what is widely perceived as the plundering of their country’s natural resources. That backlash is already evident, with Maduro’s opponents and allies alike condemning the US. Venezuela’s staggering social and economic collapse during Maduro’s rule underscores the dangers of Trump’s approach. Between 2013 and 2021, the country’s economy shrank to one-quarter of its previous size; inflation is projected to exceed 680% in 2026; and 80% of the population lives in extreme poverty.
Diverting Venezuelan oil revenues to the US would necessarily deprive any government of the funds needed to tackle this crisis. Trump could, in theory, declare victory and abandon his quest to seize Venezuela’s oil. Such an outcome is of course, unlikely. Trump came for the oil, and he is determined to get it. But contrary to his expectations, Maduro’s removal may push that goal further out of reach, destabilising the region and accelerating Trump’s own domestic decline.
The writer is Emeritus Professor of Latin American Studies & Political Science at Stanford University.