Venezuela, boasting the world’s largest proven oil reserves, is under intense military pressure from the US. The military build-up around Venezuela is scary. The arrival of the USS Gerald Ford aircraft carrier strike group in the Latin American region in mid-November dramatically deepened the tension between the US and Venezuela. President Donald Trump ordered the deployment of the Ford, despite the presence of eight warships, a nuclear submarine and F-35 aircraft already in the area. The deployment continues to move unabated.

Around 25 per cent of all US warships deployed globally are now concentrated off the coast of Venezuela. This is the largest military deployment in Latin America since the 1989 invasion of Panama.

President Trump and his administration are insisting on regime change in Caracas; they want Maduro to step down. The left-leaning President Nicolás Maduro of Venezuela, whose re-election for the third time to the office in Caracas last year is considered illegal in many Western capitals, says the real motive behind the massive US military buildup in the Caribbean is oil.

Trump is eyeing our oil assets, says Maduro. He says that the escalating pressure from the US comes down to one thing: Washington wants to grab the South American nation’s vast oil reserves. Colombia’s leftist President Gustavo Petro also views the US campaign as a pressure tactic to force Caracas to negotiate its vast oil assets. Cuba’s position is no different.

Some in the US have been arguing for intervening in Venezuela to avail opportunities to revive America’s oil industry

Increasing the pressure on Caracas, the American military seized an oil tanker on Dec 10. The tanker was allegedly carrying Venezuelan oil in violation of US sanctions. Striving to strangulate the Venezuelan oil exports, Washington threatened further actions against vessels carrying Venezuelan oil.

Despite its vast crude oil reserves, geopolitics and US sanctions have transformed Venezuela into a tiny player in the global energy equation. Its crude output has dropped off sharply since the early 2000s, as former President Hugo Chavez and then the Maduro administration tightened control over the state-run oil company, PDVSA, leading to an exodus of more experienced staff.

In contrast to significant output at the beginning of the century, in November, Venezuela produced an estimated 860,000 barrels per day, according to the latest oil market report from the International Energy Agency. That is barely a third of what it was 10 years ago, accounting for less than 1pc of world oil consumption. From a global demand-supply perspective, that is insignificant. Yet, Venezuelan crude remains relevant to the US interests.

The US is currently the world’s largest producer of oil, considerably ahead of Russia and Saudi Arabia. However, the quality of the oil being produced in the US presents another set of problems for Washington.

Courtesy of the shale revolution, the US crude imports have gone down. It is no longer the largest importer of oil. Today, China is the world’s largest importer of oil. Yet, most of the shale oil produced in the US is light crude. And the US also needs ‘heavy, black, lumpy, crude’ to meet its requirements. With many of its refineries in the oil belt, originally custom-built to refine heavy crude, the US needs to import heavy oil in considerable volumes.

The issue for the US now is where to get heavy crude? Arab oil is generally light. Shale oil is light. So, the US needs to source this type of crude. There are not many producers around for this type of oil. This heavy variety of oil is produced in a few countries, Canada, Russia and Venezuela. Traditionally, Venezuela and Canada were the major suppliers of heavy crude to US refiners. Since its sanctions, the US imports meagre volumes of heavy crude oil from Venezuela and is currently heavily reliant on Canada to meet its requirements of heavy crude.

Some in the US look at the situation as an opportunity; if they could encourage a regime change in Caracas and the leftist government of Maduro gets replaced by a pro-West government, the flow of heavy oil from Venezuela could restart in a big way. This would also help the US leverage its negotiating position with both Canada and Russia — the two other major heavy oil producers in the world.

If a change of guard takes place in Caracas, oil majors would be allowed by the US to re-enter the country. Chevron is already there. It may take the oil majors to jump-start the crumbling oil sector in Venezuela, and the dwindling output in the country could begin creeping up rapidly in such a scenario.

Though, analysts are divided on the reason behind the US moves.

“I think oil may be one of the motivations [of the military buildup],” Francisco J Monaldi, director of the Latin America Energy Programme at Rice University’s Baker Institute for Public Policy, in Houston, was quoted in the media as saying.

Some in the US have been forcefully making the case for intervention in Venezuela by pointing to the opportunities for American businesses to revive the country’s oil industry.

“Venezuela, for the American oil companies, will be a field day,” Florida Republican congresswoman María Elvira Salazar said in a recent interview on Fox Business.

“American companies can go in and fix all the oil pipes, the whole oil rigs and everything that has to do with... oil and the derivatives.”

Despite the rhetoric and the heating up of the war theatre, some questions persist. Will President Trump, seeking a Nobel Peace Prize, really go to war? That would tarnish the image he is trying to build around himself — of a peacemaker. This would torpedo his prospects of getting the coveted prize.

Historically, oil and geopolitics move in tandem, going virtually hand in hand. The war theatre in the Caribbean is no exception. That the US is eyeing the Venezuelan oil assets cannot be ruled out in these circumstances. It fits into the overall scheme of things.

The writer is an energy analyst and has delivered talks at the Department of Energy in Washington and the International Energy Agency

X: @rhusainsyed

Published in Dawn, The Business and Finance Weekly, December 22nd, 2025