It wasn’t just “oil, stupid”; it was the combination of geopolitics, efforts to ensure the dominance of the US-led global financial system, and the heavy, sour Venezuelan grade of oil that mattered and spurred the US into action against the left-leaning Maduro in Venezuela.

Whether the action was legal or illegal is completely beyond the ambit of this piece.

The US is currently the world’s largest producer of oil, considerably ahead of Saudi Arabia, Russia, and Canada. However, most of the oil produced in the US, courtesy of the shale revolution, is of a light, sweet grade. However, many US refineries are not configured to process this type of oil. Most are designed to refine heavy, sour crude.

The US needs this heavy, sour crude to meet its needs, and Venezuela has this grade of oil. In fact, the country has the world’s largest proven reserves of this grade of oil. Once upon a time, Venezuela was the major supplier of this grade to the US; not anymore.

For the last several years, the heavily sanctioned, deteriorating and crumbling oil industry infrastructure of Venezuela was unable to keep its output in line with its reserves, and its production has been going down and down. In recent months, it was down to less than a million barrels per day (bpd) — less than one per cent of the total global output, but this was insignificant in the global perspective.

As one of the few countries capable of producing sour, heavy crude, the US-forced Venezuelan ‘regime-change’ could help Uncle Sam reduce its dependency on Canadian supplies

There are not many producers of this heavy and sour grade of crude. One other producer is Russia, and the Russian output has also been under severe US and Western sanctions. The only other country in this category is Canada.

With the changing global scenario, Canada is currently the largest supplier of heavy, sour crude to the US. Currently, the country holds almost 90pc share of the US market of this grade of crude oil.

And this provides Canada with leverage in its ongoing tariff negotiations with the US. But if, and this remains a big if, the Venezuelan oil industry gains momentum, gets back on its feet, as promised by Trump, Canada would lose the leverage it currently holds; Trump could be targeting that.

But putting the Venezuelan oil industry back on track is easier said than done. Given the current state of the Venezuelan oil industry infrastructure, it will be time-consuming and may take five to 10 years, and considerable investment. According to some media reports, some $58 billion in investment is required to turn around the Venezuelan oil sector in the near term and get it back on track.

Are oil majors prepared to move into Venezuela on such short notice and make massive investments? That remains a big if. After all, political stability is an absolute necessity for the oil majors to move into Venezuela, and that is not guaranteed yet.

By capturing the left-leaning Maduro, Trump has also sent a clear signal to both Russia and China that it won’t let them mess around with the dollar-led global financial system

Remember the “Mission Accomplished” banner in Iraq? Ultimately, the US had to opt out of Iraq without much success. Venezuela is also at a crossroads. Despite the removal of president Nicolas Maduro, political stability in Venezuela is still far from certain. It will take months, if not more, before a clearer picture is available. Until then, any significant investment in the oil sector in Venezuela by oil majors remains suspect.

This also means Canada still has a few years to maintain a healthy share of the US market for this heavy, sour crude oil.

After bringing about a ‘regime change’ in Venezuela, the US under Trump has sent out a clear message to states not complying with US demands.

Greenland, Iran, and maybe even Canada could be next; who knows? By capturing the left-leaning Maduro, Trump has also sent a clear signal to both Russia and China that it won’t let them mess around with the dollar-led global financial system. In 2018, Venezuela announced it would “free itself from the dollar” and began accepting yuan, euros, and rubles for its oil sales. Caracas also began building direct payment channels with China, as opposed to the US SWIFT system.

Washington is not yet ready to accept any challenge to the dominance of the US dollar in the global financial system. In 2000, Saddam Hussein announced Iraq would sell oil in euros and not in US dollars. By 2003, the US invaded Iraq, Saddam was removed, and Iraq immediately switched to US dollars for its oil sales.

In 2009, then-President Gaddafi of Libya proposed a gold-backed African currency, the “gold dinar,” for oil trade. Within two years, the North Atlantic Treaty Organisation bombed Libya and Gaddafi was murdered.

And now the Maduro episode. All this may not be just a coincidence. There is rhythm to this entire madness.

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, January 12th, 2026