Day: January 9, 2026

In early January 2026, President Donald Trump authorized a daring U.S. military operation to capture Venezuelan President Nicolás Maduro, framing it as an arrest on narcoterrorism charges.

This action, dubbed by analysts as Trump’s “Venezuelan gambit,” has thrust the oil-rich nation into the spotlight, with Trump openly declaring intentions to temporarily “run” Venezuela and harness its vast petroleum resources for American benefit.

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From Tilak´s Substack

From Tilak Doshi

In the pre-dawn hours of January 3rd, 2026, US special forces executed an audacious raid on Venezuelan military installations, capturing President Nicolás Maduro and his wife, Cilia Flores, and whisking them aboard the USS Iwo Jima for trial in New York on narcotics-terrorism charges. This swift operation, detailed in President Trump’s subsequent press conference, was no mere act of retribution against a narco-state regime. It marked the bold application of what the administration calls the “Trump Corollary” to the Monroe Doctrine, a policy pivot outlined in the November 2025 National Security Strategy (NSS).

Trump’s removal and capture of Nicolás Maduro and the de facto US takeover of Venezuela’s oil future mark a decisive reordering of the global petroleum chessboard, tilting power toward non‑OPEC producers in the Americas and sharply curbing the room China and Russia once had to use Venezuela as a strategic beachhead in the Western Hemisphere. This is not only a regime change; it is an energy‑security doctrine in action, with the Monroe Doctrine now explicitly applied to pipelines, refineries and heavy‑oil upgraders as much as to naval squadrons and missile bases.​

From open door to expropriation

For a century, Venezuela’s ascent as an oil power was inseparable from US capital, technology and markets. By the late 1920s, American majors such as Standard Oil (the ancestor of ExxonMobil) and Gulf had turned what was once an agricultural exporter into one of the world’s leading crude suppliers, with over a hundred foreign oil companies operating in the country by 1929. The 1943 Hydrocarbons Law, which introduced a 50‑50 profit split, was emblematic of a broadly cooperative investment environment that relied on foreign capital investment, foreign engineering talent and US refineries on the Gulf Coast.​

Nationalisation in 1976 created PDVSA, the national oil company, but did not initially sever these ties. PDVSA’s technocratic leadership ran the company as a quasi‑independent commercial entity, continued joint ventures and preserved high operating standards, which underpinned production of well over three million barrels per day during the late 1980s and 1990s. The deeper rupture came with Hugo Chávez’s politicisation of PDVSA. Mass firings of experienced engineers after the 2002-03 strike, punitive fiscal changes and expropriations drove out firms such as ExxonMobil and ConocoPhillips and triggered a slow‑motion collapse of investment, productivity and institutional competence.​

Chávez’s ‘Bolivarian Revolution’ transformed PDVSA from an oil company into a political instrument. Following the 2002-03 strike, more than 18,000 experienced PDVSA staff — engineers, geologists, project managers — were purged and replaced with loyalists. Technical competence gave way to ideological conformity. PDVSA’s expert staff migrated to Houston, Calgary, Dhahran (Saudi Aramco’s headquarters) and other oil centres around the world.

The China-Russia detour that failed

As Washington-Caracas relations deteriorated under Chávez and Maduro, Venezuela turned to Beijing and Moscow as creditors of last resort, bartering its future oil output against loans and political protection. Between 2010 and 2013, Venezuela absorbed roughly two‑thirds of all new Chinese policy‑bank credit to Latin America, much of it structured as oil‑backed lending that tied PDVSA to long‑term discounted-price heavy crude oil deliveries to Chinese entities. Russian state giant Rosneft stepped in as Western sanctions tightened, advancing about $6.5 billion to PDVSA in prepayments, taking almost half of Citgo’s shares as collateral and expanding its stakes in Orinoco Belt ventures and Venezuelan gas fields.​

Yet this axis never produced a genuine recovery of the Venezuelan oil sector. Chinese and Russian capital was poured into a structurally mismanaged company starved of maintenance, where chronic under‑investment, graft and technical decay overwhelmed any injections of capital. As production slid from almost 3.5-4 million barrels per day in the late 1990s to well under one million barrels per day by the late 2010s, even China began to unwind its exposure, imposing a debt moratorium in 2016 and shifting from fresh sovereign loans to more cautious joint‑venture financing.​

Trump’s Monroe Doctrine for Oil

Trump’s new National Security Strategy explicitly revives the Monroe Doctrine as an “energy dominance” strategy, pledging to “reassert and enforce” US pre‑eminence in the Western Hemisphere and to deny extra‑regional powers the ability to own or control strategically vital assets in the Americas. The seizure of Maduro — legally framed through earlier US narco‑terrorism indictments and the State Department’s designation of the ‘Cartel de los Soles‘ network as a terrorist organisation — provided the trigger to apply this doctrine in its most muscular form.​

In his post‑operation remarks, Trump was typically blunt: US “biggest anywhere in the world” oil companies will be invited to “spend billions of dollars, fix the badly broken infrastructure… and start making money for the country”, signalling that Washington intends to set the rules for production, refining and export from the world’s largest proven oil reserves. Chevron never fully left Venezuela despite the Chávez-Maduro era and now sits in pole position, while former investors such as ExxonMobil and ConocoPhillips — victims of earlier expropriations — are obvious candidates for a return under US protection.​​

Non‑OPEC Americas versus OPEC+

Control over Venezuela’s 300 billion barrels of proven reserves — the largest in the world and valued at a notional $17 trillion at current crude oil prices — effectively folds an OPEC founding member into a US‑led hemispheric oil bloc anchored in shale, Canadian oil sands and Gulf of Mexico production. Even allowing for heavy‑oil complexity and degraded infrastructure, a medium‑term ramp‑up from today’s sub‑million‑barrel output toward two to three million barrels per day over the next five to seven years would reconfigure global supply dynamics just as OPEC+ struggles with internal cohesion and sanctions on Russia and Iran.​​

This shift strengthens non‑OPEC producers in three ways. First, it widens the slate of secure, politically aligned supplies available to Atlantic Basin refiners, diluting OPEC’s leverage over marginal barrels and price spikes. Second, it creates a de facto pricing axis running from the Permian Basin through Alberta and the Orinoco Belt, with the United States at the regulatory and logistical centre, able to influence quality‑specific benchmarks for heavy sour crudes that were once the preserve of OPEC exporters. Third, by aligning Venezuelan output with US export infrastructure and Gulf Coast refiners, it undercuts the room for Moscow and Riyadh to use coordinated cuts under the OPEC+ umbrella to discipline markets without confronting a disciplined counter‑bloc of flexible non‑OPEC supply.​​

Canada, Alberta, China, Russia and hemispheric gravity

The US Monroe Doctrine for oil also reshapes intra‑American bargaining, particularly with Canada. Alberta’s oil sands have long supplied heavy crude to US Gulf Coast refineries tailored to process such grades, giving Ottawa leverage in wrangling over pipelines, tariffs and climate conditions attached to export routes. Trump’s effective control over future Venezuelan heavy crude weakens that bargaining position: if Venezuelan heavy barrels can be restored and shipped reliably, Washington has a substitute for Alberta’s flows, dramatically changing the tone of any dispute over new lines to the Pacific Coast for Asian markets.​​

Alberta’s political leadership, already wary of Canadian Prime Minister Mark Carney’s federal Net Zero‑driven constraints, will see in Venezuela’s reintegration into a US‑centric energy sphere a reminder that geography and refinery configuration tie the province more closely to Houston than to Ottawa’s green technocracy. The more Ottawa doubles down on carbon‑pricing and regulatory hurdles, the stronger the gravitational pull of a continental strategy in which American, Canadian and now Venezuelan heavy crudes are optimised across a single integrated system of pipelines, refineries and export terminals.​ The Canadian state has been exploring ways to assert greater autonomy without necessarily leaving Canada, as well as more radical discussions around full separation.

For Beijing, the implications are stark. Chinese policy banks extended tens of billions of dollars to Venezuela in oil‑backed loans, and Chinese companies entered joint ventures precisely to secure long‑term access to heavy crude outside US influence. With Washington now setting the legal and security framework in Caracas, those ‘secure’ flows are subject to the constraints of a doctrine that explicitly seeks to deny non‑hemispheric competitors’ control over strategic assets, forcing China into a defensive posture where it must renegotiate, accept less favourable terms or watch sunk capital stranded.​​

Moscow faces a similar reversal. Rosneft’s role as financial lifeline to Maduro and its collateral stake in Citgo were designed to lock in leverage precisely where US refineries and markets were most exposed. Now, the very collateral that secured Russian prepayments becomes vulnerable to US courts and regulators, while future Venezuelan barrels are increasingly likely to flow under contracts that support the petrodollar system rather than Russia’s rouble‑ or yuan‑denominated experiments. In one stroke, Washington has turned a potential Eurasian energy outpost in the Americas into a platform for pushing back against the BRICS energy realignment centred on Russian pipelines and Chinese credit.​​

Energy realism and US security

Seen through the lens of Trump’s wider security doctrine, the Venezuelan operation is not an isolated adventure but a logical extension of a broader turn from ‘global policeman’ to hemispheric energy powerhouse. By aligning the Western Hemisphere’s vast fossil‑fuel resources — US shale, Canadian oil sands, Brazilian pre‑salt, Guyana’s newfound reserves and now Venezuelan heavy crude — under a framework that privileges reliable, low‑cost supply over Net Zero symbolism, Washington reduces its exposure to Eurasian pipeline politics and Middle Eastern instability.​​

The upshot is a world in which petro‑power is less about OPEC quotas and communiqués and more about which bloc can combine geological abundance, technological prowess and political coherence. On that score, a US‑anchored Americas, enhanced by a revitalised Venezuela, looks considerably more robust than an ideological Net Zero-constrained Europe or a Sino‑Russian Eurasian axis entangled in over‑leveraged, under‑performing bets in failing petro‑states.

Trump’s capture of Maduro thus does more than resolve a long‑running alleged narco‑terrorism case. It upends the prevailing assumptions of the international oil industry, strengthens non‑OPEC producers across the Americas and reasserts US national security not as an abstract project but as a concrete, energy‑realist strategy — at substantial cost to the ambitions of China and Russia in Latin America.

The Devil’s Excrement or a Positive‑Sum Game for Venezuelans

Critics will denounce Trump’s move as neo‑imperialism in oilman’s clothing. Yet such rhetoric ignores the human and economic catastrophe presided over by Chávez and Maduro: an economy in free fall, hyperinflation measured in millions of percent and a mass exodus of millions of Venezuelans fleeing shortages and collapsing public services. PDVSA’s hollowing‑out — engineers fired for political reasons, maintenance deferred, corruption entrenched — turned the world’s richest oil endowment into a miserable tale of resource nationalism divorced from competence.​ Resuscitating the country’s oil production and reforming its state-controlled company, PDVSA, will take years.

A restored partnership with US firms, if anchored in transparent contracts and a credible constitutional transition led by a genuine elected alternative, offers something social‑engineering ‘Bolivarianism’ never delivered: sustained investment, real jobs and hard‑currency revenues that can fund infrastructure, health and education rather than kleptocratic patronage and Cuban intelligence networks. For ordinary Venezuelans, the alternative is not some poorly thought-out autarky but the continuation of a failed experiment in politicised oil that already destroyed their living standards; the realistic choice is between remaining a failed state or becoming again a central pillar of a hemispheric energy‑security architecture.​​

Juan Pablo Pérez Alfonzo, a prominent Venezuelan politician and a co-founder of OPEC, famously described oil as “the devil’s excrement” in 1975, a prophetic warning about the dangers of over-reliance on natural resources. While oil brought Venezuela immense wealth, he predicted that it would ultimately lead to ruin, waste, corruption and a decline in other sectors like agriculture: “Trouble — waste, corruption, consumption, our public services falling apart. And debt. Debt we shall have for years.” The ‘resource curse’ or the ‘Dutch Disease’ are terms now widely used to explain why many resource-rich countries, unlike nations with more diversified economies and competent policymakers (such as Norway), often fail to achieve sustained prosperity and strong institutions.

If competently prosecuted, President Trump’s Venezuela gambit – an illegal attack on a sovereign nation under international law though characterised by US Secretary of State Marco Rubio as a “law enforcement” action aimed at addressing “narco-terrorism” – presents the potential, at last, to turn Venezuela’s oil from a curse on its people back into a blessing.​

This article was first published in the Daily Sceptic https://dailysceptic.org/2026/01/07/trumps-venezuelan-gambit-and-the-reordering-of-global-oil-geopolitics/

Dr Tilak K. Doshi is the Daily Sceptic‘s Energy Editor. He is an economist, a member of the CO₂ Coalition and a former contributor to Forbes. Follow him on Substack and X.