Trump's bid to reshape oil supply

President Donald Trump has said that Venezuela's interim government will deliver up to 50 million barrels of oil to the United States. "We're going to be using oil, and we're going to be taking oil. We're getting oil prices down," he added.

Trump wouldn't say for how long the US will "run" Venezuela, but what he did say was that the revenue from its oil "will be controlled by me". Trump earlier said that the US oil industry would be "up and running" in Venezuela within 18 months and that he expected massive investments to pour into the Latin American country.

This means the interim government is buckling under pressure from the US president. Trump has threatened more military action, if the interim president, Delcy Rodriguez, doesn't give the American companies "total access" to Venezuela's oil industry, and sever economic ties with China, Russia, Iran and Cuba.

This makes the strategic intent of Trump's military operation in Venezuela unmistakably clear. The cat is out of the bag. The guessing game should end now. This blatant exercise of American geopolitical power was never about "drug cartels". It was never about "narco-terrorism." It was never about democracy. It was about oil. Period. It was about resource grab. Period. Trump wanted to seize control of energy assets of Venezuela, which has nearly 17% of the world's known oil reserves, and reshape the global oil supply chain through force.

It's not the first time the US has done this. American presidents have done this in the past too – in Iran, in Libya, in Syria, and in Kuwait. In the past, however, US military interventions were typically wrapped in ideological or security justifications to make them more palatable. The 1953 US-backed regime change in Iran was framed as a necessary measure to contain communism. Similar rationales were offered over Libya, Iraq, Syria, and Kuwait, where military intervention, sanctions, or coercive diplomacy coincided closely with strategic energy interests.

It is the same playbook. The same script. Only the excuse has changed. Trump unilaterally declared Venezuela a "narco-terrorist" state and its president, Nicolas Maduro, an "illegitimate dictator," before ordering unlawful strikes on so-called "narco boats" in the Caribbean Sea. He then imposed a blockade on Venezuela in mid-December, a campaign that culminated in the dramatic seizure of Maduro and his wife by US special forces in a military operation widely condemned as a violation of the UN Charter and international law.

Trump, however, didn't go for a regime change. Instead, he signalled that Rodriguez, Maduro's deputy, should "do the right thing"- a not-so-veiled warning that her political survival depends on cooperation with the US. The objective: a direct control over Venezuela's vast oil reserves. What to expect next? American energy firms re-entering Maduro's country, injecting capital, and imposing technological and operational control, folding Venezuela's petroleum industry into a US-led energy system.

Surprisingly, oil markets have reacted with restraint. When trading opened on January 5 – two days after the Venezuela operation – Brent crude briefly fell 1.2% to around $60 a barrel, while WTI dipped before recovering by the close. This apparent calm masks deeper uncertainty. Global oil markets are currently characterised by weak demand and oversupply. By 2025, the global crude surplus had reached nearly 3.8 million barrels per day – and geopolitical risks were already priced in.

Venezuela's oil production, crippled by years of sanctions, averaged just 934,000 barrels per day in late 2025 – less than 1% of total global supply. Short-term disruptions can therefore be absorbed by other producers. Markets, too, have grasped the logic of Trump's ultimatum: Venezuela has little choice but to raise output. With American companies poised to lead "reconstruction", there is a growing sense that production could eventually recover to around 3 million barrels per day. As a result, traders see limited short-term impact but huge long-term risks of oversupply.

Even as more than 17 million barrels of Venezuelan crude reportedly remain stranded offshore and some fields face emergency shutdowns, prices have avoided sharp volatility. However, analysts warn that the broader consequences extend beyond headline prices. Venezuela is a major supplier of heavy crude, essential for many refineries in Asia and Europe. Disruptions have forced refiners to seek alternatives from West Africa and the Middle East, pushing up substitute crude prices, refining costs, and shipping risks, particularly in the Caribbean. Cost pressures are therefore rippling through the refining value chain, even without a price spike.

More strategically, the United States appears intent on "camp-aligning" the global oil supply chain. American firms plan to secure development rights in Venezuela's Orinoco heavy oil belt and redirect exports away from traditional buyers towards the US market. Long-standing importers such as India are being forced to rebuild supply chains. This is not a routine redirection of trade flows but a deliberate fragmentation of the global oil system, binding access to energy to geopolitical alignment with US interests. A divide is emerging between a US-led supply bloc and a non-cooperative camp, signalling a shift away from globalised energy markets towards strategic segmentation.

Another objective is to undermine the OPEC+ alliance. By securing control over Venezuela's vast oil reserves, the US aims to create a major supply lever outside OPEC+, offsetting the bloc's ability to manage output. Signs of erosion are already visible. Despite repeated production adjustments, OPEC+ influence has waned as the US has become the world's largest oil exporter. Internal fissures have deepened, with Saudi Arabia favouring cuts to support prices, while Russia prioritises output to defend market share amid sanctions.

US intervention also aligns with broader Trump's "America First" energy doctrine. Restoring Venezuelan output under US corporate leadership would likely return its oil trade to dollar-based settlement, reinvigorating the petrodollar system and neutralising de-dollarisation efforts, especially from the Global South. At the same time, Washington continues to sanction countries experimenting with non-dollar energy trade, seeking to preserve monetary dominance. This hegemonic reconstruction risks eroding trust in global energy governance, making geopolitics – rather than supply and demand – the primary driver of markets.

In the short term, US military action is expected to heighten volatility and risk premiums, with Brent crude likely fluctuating between $58 and $63 per barrel. However, fundamentals remain weak. The International Energy Agency projects a surplus of up to 4 million barrels per day in 2026, suggesting prices may retreat once geopolitical tensions stabilise.

In the medium term, if US control consolidates and Venezuelan production recovers, oversupply pressures will intensify, particularly alongside expansion in the Gulf and sustained US output. Over the longer term, the global oil system may evolve into a tripolar structure dominated by the US, the Middle East, and Russia, further weakening OPEC+. Combined with fast-paced energy transition and slowing demand growth, this fragmentation will reshape energy geopolitics for years to come.

America's explicit pursuit of oil resources has reshaped power dynamics in the global energy market. While this strategy may deliver short-term gains, history shows violations of sovereignty and unilateral control over resources inevitably provoke resistance and long-term instability.

The writer is an independent journalist with a special interest in geoeconomics