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."
