Why is Trump so greedy for Venezuelan oil?

According to Ashura News, citing CNN, the US State Department claimed that Venezuela's oil resources are not the US's motivation for sending more than 12 warships and 15,000 US troops to the region. The Trump administration claims that its military threats are part of US efforts to stop the flow of illegal immigrants and illegal drugs from Venezuela.

Venezuela's huge treasure trove of black gold

Venezuela has a huge oil reserve of 303 billion barrels of crude oil, which according to the US Energy Information Administration, is about one-fifth of the world's oil reserves. Therefore, Venezuela is the largest known crude oil region in the world.

Venezuela produces about one million barrels of oil per day, which, of course, only accounts for about 0.8 percent of global crude oil production. That’s less than half of Venezuela’s oil production before Maduro took power in 2013, and less than a third of the oil it produced before the socialists took power in Venezuela in 1999.

The U.S. Energy Information Administration believes that international sanctions on the Venezuelan government and the country’s economic crisis, combined with a lack of investment, have contributed to the decline in its oil industry. As a result, Venezuela’s energy infrastructure is deteriorating and its oil production capacity is declining.

The U.S. government has imposed sanctions on Venezuela since 2005. In 2019, the first Trump administration halted all crude oil exports to the United States from state-owned oil company Petroleos de Venezuela. In 2022, former U.S. President Joe Biden granted Chevron a license to operate in Venezuela as part of an effort to lower gasoline prices, but Trump revoked the license last March. However, he later reissued the permit, with the condition that none of the revenue go to the Maduro government.

The United States produces more oil than any other country in history. But it still needs to import oil, especially heavy Venezuelan crude. The United States produces light crude, which is suitable for gasoline production, but heavy crude, like Venezuela’s, is essential for the production of some products in the refining process, including diesel, asphalt, factory fuel and other heavy equipment. Diesel production around the world is facing a supply shortage, in part because of sanctions on Venezuelan oil.

According to the U.S. Energy Information Administration, the United States has imported 102,000 barrels of oil per day from Venezuela since last September. That makes Venezuela the 10th largest oil exporter to the United States, but that position is not a good one for Washington, and the United States needs Venezuelan oil more than it shows.

Phil Flynn, senior market analyst at trading group Price Futures, said Venezuela is geographically close to the United States and its oil is relatively cheap. On the other hand, most American refineries are built to process Venezuelan heavy oil and are much more efficient at using Venezuelan oil than American oil.

The Americans want to turn Venezuela into a very large source of oil for their own use by overthrowing the Maduro government in Venezuela. This could provide opportunities for Western oil companies. The United States is trying to use Venezuela's huge oil reserves as leverage to counter the risk of rising prices.

On the other hand, Russian oil is similar to Venezuelan oil, and for this reason, India and China remain heavily dependent on it despite international sanctions against Russia. Increasing Venezuelan oil production capacity could provide an alternative for US allies to not need Russian oil and weaken the Russian economy as a US competitor.

All of these factors suggest that Venezuela's oil reserves play a major role in Trump's decision to wage war in Venezuela and increase pressure on the Maduro government. "Oil is the core of the problem. I think that's Trump's goal," Colombian President Gustavo Petro said in an exclusive interview with CNN.