News
05/01/26
No upstream gain from US' Venezuela intervention
Washington, 5 January (Argus) — The largest US military intervention in Latin
America in decades will not significantly boost Venezuela's oil production in
the short or medium term even though the White House is improvising a new,
oil-centered approach to Caracas. US president Donald Trump has deployed US
special forces to remove Venezuelan president Nicolas Maduro from power and
transport him to face drug trafficking charges in a US court in New York. But
the Trump administration has decided to work with the remnants of the Maduro
government, calculating that it will now bend Caracas to its will to address US
immigration concerns and to carve out a bigger foothold for US companies in
Venezuela's oil industry. "We're gonna have the big oil companies go in, and
they're gonna fix the infrastructure, they're gonna invest money," Trump told
reporters Sunday night. Like many of Trump's initiatives, his Venezuela policy
falls into the category he once called having "concepts of a plan" — a complex
endeavor where he outlines an end goal but not the means of getting there. A
meaningful turnaround in Venezuela's upstream industry requires costly repairs
to basic energy infrastructure covering everything from pipelines to power
supplies, as well as access to the latest equipment and a skilled labor force
that is ready to go. Venezuela's opposition, centered around Maria Corina
Machado, laid out a detailed plan for opening Venezuela's oil industry to
foreign investment. The plan had the input of former PdV executives and
Venezuelan economists forced into exile. But the Trump administration has
signalled it has no desire to help Machado take the reins of power in Venezuela.
"What we want to do is fix up the oil, fix up the country, bring the country
back, and then have elections," Trump said, expressing doubts about Machado's
capacity to govern the country. Machado is "fantastic" but "we have short-term
things that have to be addressed right away," by working with the existing
government, US secretary of state Marco Rubio said on Sunday. The "short-term
things" on the Trump administration's agenda almost certainly involve Venezuelan
migrants living in the US, whom it wants to return to Venezuela. Trump on Sunday
night doubled down on his comment that the US would "run" Venezuela under its
interim president Delcy Rodriguez, who served as Maduro's vice president and oil
minister. "We need total access," Trump said, outlining his demands for
Rodriguez. "We need access to the oil, and to other things in their country that
allow us to rebuild their country." Serving as a loyal servant of Washington
would be quite a departure for the regime that made "anti-imperialism" a key
tenet of its messaging in the past 27 years. For now, key figures of the regime,
including interior minister Diosdado Cabello, are rallying behind Rodriguez, who
expressed willingness to cooperate with the White House before being sworn in as
the interim president on Monday. Rodriguez took the oath of office in the
presence of her brother, the powerful National Assembly president Jorge
Rodriguez and Maduro's son Nicolas. Rodriguez immediately signed a decree
granting "extraordinary powers" to Cabello-led police forces and to the
military, led by defense minister Vladimir Padrino. Maduro on Monday made his
first appearance at the US District Court for the Southern District of New York,
pleading not guilty to the US criminal charges and declaring himself a "prisoner
of war". Rodriguez has so far not named a replacement for herself in the
position of oil minister. PdV operations continue apace. A Chevron
representative in Caracas told Argus , "PdV is bulletproof!". Venezuela's crude
output was 934,000 b/d in November, according to an average of Opec secondary
sources including Argus . An embargo on Venezuelan crude shipments transported
by tankers sanctioned by the US remains in place. But as many as 16 tankers are
believed to have left Venezuela in defiance of the US blockade since Maduro's
capture, according to vessel tracking website TankerTrackers.com. A sustained
disruption to Venezuelan oil exports would primarily affect the global
heavy-sour crude market. Chinese independent refiners are preparing to switch to
Iranian, Russian or unsanctioned grades, or even lowering their run rates if
Venezuelan crude becomes unavailable. Any reconfiguration of Venezuela's oil
industry would pit the US against China, whose state-owned firms have been
unable to collect on $12bn worth of loan-for-oil schemes because of the US
sanctions and Venezuela's falling output. Then there is also the matter of
potentially getting the US military involved in another quagmire that Trump has
vowed to avoid after costly US engagements in Iraq, Afghanistan and Libya. The
Trump administration says that its military operation in Venezuela is in fact
not a military operation but a domestic law enforcement matter that requires no
consent from Congress. "The whole foreign policy apparatus thinks everything is
Libya, everything is Iraq, everything is Afghanistan," Rubio said. This is not
the Middle East, and our mission here is very different. This is the western
hemisphere." By Haik Gugarats and Carlos Camacho Send comments and request more
information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All
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