{"id":3753,"date":"2026-01-04T12:06:53","date_gmt":"2026-01-04T11:06:53","guid":{"rendered":"https:\/\/johanno1.se\/usa-venezuela-and-the-oil\/"},"modified":"2026-01-05T08:19:57","modified_gmt":"2026-01-05T07:19:57","slug":"usa-venezuela-and-the-oil","status":"publish","type":"post","link":"https:\/\/johanno1.se\/en\/usa-venezuela-and-the-oil\/","title":{"rendered":"USA, Venezuela and the oil"},"content":{"rendered":"\n

Trump has now brought Maduro and also his wife to the USA where they will stand trial.
At the same time, he has stated that the USA will take control of Venezuela and its oil.<\/p>\n\n\n\n

Of course, this is completely irregular and violates international law, etc.
At the same time, in the long run, it may be the best for Venezuela (I acknowledge that there is a bit of cognitive dissonance in me, depending on where it ends).<\/p>\n\n\n\n

Regardless, this is very bad on a global scale. The USA is showing its worst side and behaving much like Russia.
They grab what they want because they can. It will be difficult to protest against China if they actually choose to attack Taiwan, but one also understands why Trump does not want to stop Putin, he is not any better himself.<\/p>\n\n\n\n

Will Greenland be the next target?<\/p>\n\n\n\n

Perhaps this was not such a smart move by Trump either, he campaigns on the idea that the USA should not interfere in other countries and then he attacks Venezuela. But now maybe he won’t have to hear any more about Epstein? It will be interesting to see in the coming weeks if he will be hailed as a hero or if he will face resistance.<\/p>\n\n\n\n

Maduro has hardly been a good leader, and a large part of the country’s population has fled because he has oppressed the opposition and the country’s development has stagnated during his years in power. This is partly due to US sanctions, which have resulted in very few investments in the country and its oil production. China has made some investments in recent years, and Russia has also tried to gain influence, but more through selling weapons, etc.<\/p>\n\n\n\n

It is impossible to know at this point how it will end for the people in Venezuela. Will the USA ensure that there are real democratic elections so that the people can choose their leaders themselves? Will their oil production be restored and contribute to the flourishing economy and improved quality of life?<\/p>\n\n\n\n

It largely depends on how the USA acts. The risk, of course, is that we will see something similar to what we have seen before. The USA ensures that a US-friendly leader is installed who also, without any fuss, lets the USA take control of the oil. Colonialism 2.0 without the people noticeably benefiting.<\/p>\n\n\n\n

So far, the USA has not taken over the country, and it may end up not going much further than this, but I assume that Trump’s statement regarding Venezuela and oil is serious, and the rest of the text will be about oil because that is what the whole attack on Venezuela is about.<\/p>\n\n\n\n

US Oil Production<\/h2>\n\n\n\n

Today, the USA extracts almost all of its oil through fracking, where they drill into shale fields. It has almost become a truth that US oil production is very expensive, but that is not entirely true today.<\/p>\n\n\n\n

During the years 2014-2016, OPEC attempted to eliminate their production by starting overproduction, which in turn led to such low prices that the idea was for the USA to be forced to shut down its extraction. They succeeded to some extent as hundreds of companies actually had to shut down. At the same time, the USA managed to significantly reduce its costs through technological development and mergers, and OPEC eventually had to give up.<\/p>\n\n\n\n

Fracking is still more expensive than, for example, in the Middle East but is quite close to the cost of offshore oil rigs. However, they have a significant advantage when it comes to flexibility.
With fracking, new wells must be drilled continuously as they only produce oil for a few years. It is quick to drill new wells to increase production, and if a decrease is needed, they can simply stop drilling.
It is the opposite of other extraction methods, and increased flexibility makes it easier to match the market and thus achieve better profitability in the long run.<\/p>\n\n\n\n

However, there are issues with export costs. The USA has increased exports every year, but even though they have expanded pipelines and some deep-water ports, the costs are higher for customers when transportation is included. This is one reason why the price of CrudeOil\/WTI is lower than Brent.<\/p>\n\n\n\n

The USA cannot charge the same prices as the rest of the world if they are to compete. Considering that fracking is somewhat more expensive, profitability is also somewhat lower.
Furthermore, the USA is currently at maximum capacity for its exports. Not in terms of production, but in terms of the ability to transport it through pipelines to the ports and also the ports’ capacity.<\/p>\n\n\n\n

They, for example, have to use smaller vessels to transport the oil to larger tankers, and internally in the country, some of the oil is transported by tank trucks and trains, which is also costly.<\/p>\n\n\n\n

Additional investments would be needed to increase exports, investments that cost money, further reducing profits. The price of oil would need to rise for the investments to be worthwhile (if they want to maintain the profit margin).<\/p>\n\n\n\n

The USA exports just over half of its oil if we also include oil products such as gasoline, etc.
At the same time, they consume significantly more oil and oil products, and domestic production only covers about 70% of what they consume. They have been a net exporter for a few years, but still need to import.<\/p>\n\n\n\n

One of the reasons for importing, besides consuming more than they produce, is the interesting fact that their refineries are designed to handle heavy oil while domestic production yields lighter oil. Therefore, refineries yield the best returns with imported heavy oil (like the one found in Venezuela). The major oil companies that own the entire chain thus sell some of their lighter oil to be able to import heavier oil.
So, there is a difference between oil and oil.<\/p>\n\n\n\n

Trump has stated that he wants to see increased oil production “Drill baby drill,” and there has been an increase in 2025, but it is at the same level as it was in 2023 and 2024, so there is no significant difference. The capacity for both production and export has increased every year. There is still room, of course, to increase exports. At the same time, more bottlenecks have emerged, squeezing margins. The larger companies that own both refineries, pipelines, and wells fare better than others who are forced to buy more expensive logistics.<\/p>\n\n\n\n

Continued growth will lead to reduced profit per barrel, so there probably won’t be any major rapid increases unless, of course, the oil price rises.<\/p>\n\n\n\n

Trump’s desire for a significant increase shows that he does not seem to understand the industry.<\/p>\n\n\n\n

Oil in Venezuela and What It Could Mean if the USA Takes Control of It<\/h2>\n\n\n\n

Venezuela is a marginal exporter with about 1% of the world market, and according to some reports, US efforts in Venezuela have led to a complete halt in exports. The insignificance of their oil exports is evident when one sees that the oil price has hardly been affected.<\/p>\n\n\n\n

Due to the lack of foreign investors for many years, there is speculation about whether it is even possible to significantly increase extraction, as several experts believe that most of it has been neglected. China has invested some in the infrastructure (it will be very interesting to see how they will react if the USA is now going to take over the entire oil industry in Venezuela).<\/p>\n\n\n

It will likely require a lot of investments to boost production while operating in a country that may become unstable. Additionally, if production is successfully increased, it will lead to even lower prices, reducing the USA’s own margins.<\/p>\n\n\n\n

The larger oil companies in the USA, with the resources to make investments, will probably perceive it as too risky. Furthermore, they will be competing with their own oil production in the USA.<\/p>\n\n\n\n

The companies that might be interested are those that currently only own refineries adapted for heavy oil, without any extraction operations. The question is whether they have the capital and if they truly want to get involved in Venezuela. Regardless, it requires Venezuelan oil to be cheaper than what they can buy on the open market. Considering today’s already low oil prices, it will be difficult to make it profitable.<\/p>\n\n\n\n

If the USA simply takes full control and only pays a symbolic amount to Venezuela, there will of course be a greater chance of profitability, but then the extraction will not benefit the people.<\/p>\n\n\n\n

If an increased production is initiated (which could take several years), it will compete with domestic US production, risking what OPEC attempted. It is not impossible that OPEC seizes the opportunity to increase its production. This could backfire against the USA and Trump if the industry feels threatened, leading to cutbacks, layoffs, etc.<\/p>\n\n\n\n

So, in the short term, I don’t think there is much for the USA to gain from this. I believe that Trump has completely misjudged the interest from American companies to make investments at this time. He probably wants to show quick profits and generate revenue, but it could actually be detrimental to the USA.<\/p>\n\n\n\n

However, this certainly provides the USA with many other strong advantages.<\/strong><\/p>\n\n\n\n