Firstly, what has happened?
In the early hours of January 3, 2026, Venezuelan President Nicolas Maduro and the Venezuelan first lady Cilia Flores were kidnapped and flown to the US through a US military operation which involved attacks on the Venezuelan military bases in Fuerte Tiuna in the Venezuelan capital of Caracas and four other key strategic bases. According to the Venezuelan Attorney General Tarek William Saab, 100 people, security personnel, soldiers and civilians, were killed by US forces in the operation. No US lives were reported to be lost. Delcy Rodríguez, formerly Venezuelan oil minister and vice-president, has since been sworn in as interim president.
According to an exclusive by the Guardian on January 22, there was some prior cooperation with the Trump administration ahead of Maduro’s capture on the part of Delcy Rodríguez and her brother Jorge Rodríguez, the head of the national assembly, as well as Diosdado Cabello, the interior minister controlling the police and armed forces. This was denied by the Venezuelan government in Telesur and the Venezuelan News Agency. Regardless of the veracity of the claims by the Guardian, US President Donald Trump has cast out prominent Venezuelan opposition leader Maria Corina Machado from a governing role for the time being.
Where is Venezuela again? Who has been in power?
Venezuela is an oil-rich country located at the very north of South America. It has sea borders on the Caribbean and land borders with Colombia, Brazil and Guayana. Nicolas Maduro has been President of Venezuela since 2013. He took over from the very popular Hugo Chávez who died and had instituted a socialist program. In 2024, Nicolas Maduro was declared the winner of the presidential elections. The process around the election was extremely opaque with the Venezuelan electoral body CNE (National Electoral Council) refusing to release tally sheets from polling booths. From both the opposition and traditionally Chavista supportive sources, it was widely believed that the opposition candidate Edmundo González actually won the 2024 election.
What are Trump’s key claims and demands of Venezuela?
In a press statement on January 3, Trump asserted that the US built the Venezuelan oil industry and the Venezuelans stole it from them. Nicolas Maduro and the Venezuelan first lady will be charged with trafficking of cocaine in partnership with the Cartel of the Sun (Carteles de los Soles). Trump demands that Venezuela re-directs its oil exports to the US, and away from China, Russian and Iran.
Wait, didn’t Trump sanction Venezuelan oil in his first presidency (2016-2020) and that’s why oil was directed away from the US in the first place?
Yes, that’s right. Trump continued and extended Obama era sanctions of Venezuela which first began in 2015. In 2019, US sanctions under Trump cut US imports of Venezuelan crude and pressured third parties to avoid all trade with Venezuela. Prior to the 2019 sanctions on the Venezuelan oil industry, the majority of Venezuelan crude had been destined for the U.S. and European market, although there had been significant increases in Venezuelan oil exports to Asia, particularly China.
According to the US Energy Information Administration, the nation’s oil exports to the United States declined from over 1,000,000 barrels per day in the late 1990s to under 800,000 barrels per day in 2015. Until the introduction of the 2019 sanctions, the United States had been the top cash buyer of Venezuelan crude, notwithstanding the fact that Asia had overtaken the United States as the top destination for Venezuelan oil exports by 2014. Ongoing geopolitical tensions between US and Venezuela since 1999 prompted Venezuela to gradually seek other export destinations.
How have coup d’etats in Venezuela occurred in the past?
In the 20th century, coup d’etats in Venezuela often had US support but they were not outwardly led by the US. Each disposal of government in Venezuela had internal support from within the military. Popular support was important but internal support from within the armed forces was key (for example, the takeover by Marcos Perez Jimenez in 1948 and the later overthrow of the same Perez Jimenez in 1958).
In 2002, there was a coup against then Venezuelan president Chávez by the opposition supported by the CIA. However, through rank-and-file support in the Venezuelan military and popular support, Chávez was restored to power with 48 hours of being toppled.
Can the US just takeover the Venezuelan oil industry by sending in its own oil multinational companies?
On a practical level, yes. Oil multinational companies are experienced in going into politically complex situations. For example, US oil company Chevron has operated in Venezuela throughout the Chavez and Maduro years as well as in a number of Latin American countries of different political stripes. In a 2016 feature by Petroleum Economist, former chairman of Chevron Africa and Latin America Ali Moshiri stated that ‘Business is business. Politics is politics’. Chevron in Venezuela has operated as a number of mixed companies where the majority shareholder in each mixed company is the Venezuelan state oil company PDVSA (Petroloes de Venezuela, S.A.) and Chevron being the minority shareholder often in a 60/40 percentage arrangement.
Since 2007, all foreign oil companies investing in Venezuela have had to operate as a joint venture with PDVSA, where PDVSA is always the majority shareholder and the foreign partner as minority shareholder. Chinese oil companies such as CNPC (China National Petroleum Corp) and Sinopec operate in a similar manner.
On the other hand, a US takeover is only possible with internal support from within the Venezuelan oil industry. Venezuelan politics is extremely embedded in claims around profits from the oil industry. The Venezuelan oil industry was nationalised in 1976 under Carlos Andres Pérez. This was well before the Chávez (1999-2013) and Maduro (2013-present) governments. A nationalised oil industry has been central to Venezuelans’ understanding of their sovereignty for all political stripes. The Venezuelan oil industry currently needs huge investments because PDVSA under the Chávez and Maduro governments have not made sufficient re-investments within the company.
What are the broader geopolitical implications from this US invasion of Venezuela?
The bilateral relationship between China and Venezuela has exponentially increased since the 2008 Global Financial Crisis. This has entailed Venezuela gradually moving away from dependence on oil exports to the US through building its relations with China and other oil export destinations. China has loaned Venezuela huge sums of money (denominated in renminbi and contracts for Chinese companies in Venezuela) via an oil-for-loans scheme. These loans are cumulatively worth over US $60 billion, though numbers have not been published since 2016. A US takeover of the Venezuelan oil industry will have significant implications for its relationship with China given that China has enormous claims over Venezuelan oil given its oil-for-loans agreements with Venezuela. PDVSA underpins the relationship between China and Venezuela because Venezuelan crude oil is used to repay Chinese loans through PDVSA supplying oil to Chinese oil companies. Chinese oil companies effectively run the oil fields, the income from which PDVSA repays the loans.
This US invasion of Venezuela marks both a continuation and a break from previous interventions. It marks a continuation in that the US is merely asserting its long-held view since the 1823 Monroe Doctrine that Latin America is its sphere of influence. In the twentieth century, the CIA was involved in toppling left-wing governments such as Panama, Chile, Argentina, Brazil, and so on.
On the other hand, this invasion also marks a break in how the US has strategically approached Latin America. Previous US governments have often leant on local opposition and elites to take over as a de-facto government acting in US interests, not acted out the invasion themselves.
What is happening between the US and Venezuela now?
Currently, interim Venezuelan President Delcy Rodríguez and the Trump administration are in negotiations to reform Venezuela’s Hyrdocarbons Law. This might entail the end of the joint venture structure in which PDVSA is the majority shareholder. They have since signed a deal for the export of 50 million barrels of oil from Venezuela to the US. This will also likely permit the import of US-manufactured diluents which would upgrade Venezuelan heavy crude to a higher value-added product on the world oil market. The US had stopped exporting diluents to Venezuela due to the 2019 sanctions. This forced the Venezuelan oil industry to turn to importing diluents from other oil companies such as Russia’s Rosneft, China’s CNPC, India’s Reliance Industries, and Spain’s Repsol, and produce a less valuable product.
Conclusion
Venezuela has withstood US sanctions through the help of China, Russia and Iran. However, its economic dependency on oil and the Venezuelan oil industry’s structural ties to the US refineries, obscure much deeper difficulties. During the Chávez years of high oil prices, huge sums of money were redirected to much needed social programs, but this came at a cost to the Venezuelan oil industry’s long-term reinvestment. Despite the rhetoric of anti-US imperialism, the US was still the top cash buyer for Venezuelan oil until 2019.
Current negotiations between Venezuela and the US will probably entail much needed investment for Venezuela’s flailing oil industry, which is desired by both Venezuela and the US. However, the costs for Venezuela are substantial whichever way you look at the situation. This is an ominous reassertion of the Monroe Doctrine by Trump for Latin America with Venezuela as its first Latin American guinea pig.
For more detailed information on the 2019 US sanctions against Venezuela and the bilateral relationship between China and Venezuela, please see my chapter in Steve Ellner’s (2021) anthology Latin American Extractivism: Dependency, Resource Nationalism, and Resistance in Broad Perspective.
Comments