Key Highlights
- But it harked back to a more brazen age, when looting a continent for its resources at the point of a cannon was regarded as a legitimate activity for an English gentleman. The US president made no effort to disguise the fact that the main motivation for the snatching of Nicolás Maduro was taking control of Venezuelan oil reserves on behalf of the fossil fuel companies that helped bankroll his re-election. Trump did gesture at Maduro’s illegitimacy – the deposed and unloved president was widely accepted to have lost the election in 2024.
- But handing power to Maduro’s deputy, with no timeline for a democratic transition, makes a nonsense of any claim to be fulfilling the aspirations of the oppressed Venezuelan people. The US president had already wielded American economic power particularly blatantly in trade negotiations over the first 12 months of this second term, using the threat of tariffs to bully and cajole rivals and supposed allies alike – including the UK. Last weekend’s events made clear he is also prepared to seize resources using military force, apparently with the intention of allowing favoured corporate allies (oligarchs, as we might call them in a Russian context) to exploit them. It sets a deeply alarming precedent, in terms of what Trump himself might feel emboldened to do, with a string of other targets apparently in his sights, and what rival powers even less concerned about international law could now venture, in pursuit of economic dominance. Just as Trump’s music tastes are stuck in the days of his youth – he still likes a boogie to YMCA – his conception of what factors make the US economically successful feels hopelessly outdated. The global oil market is already well supplied, and the US has anyway become a significant net exporter since the shale boom, insulating its economy from the global energy price rises that hit Europe hard after the Russian invasion of Ukraine. There are some concerns about whether US hard-to-extract shale oil is economic at the current, relatively low oil price of less than $60 (£44) a barrel for the US West Texas Intermediate benchmark, however.
- Yet Trump appears to want to drive that price lower. He is unlikely to succeed any time soon anyway: heavy Venezuelan oil is expensive to produce and refine, and analysts believe it will take many years, and billions of dollars, to boost output significantly. As the Washington-based Institute of International Finance put it last week: “While medium- to long-term upside to Venezuelan supply exists, the balance of risks points to a gradual and conditional recovery rather than swift normalisation, with the potential for renewed setbacks if political or policy frictions intensify.”Instead of oil, the resource bottlenecks that most concern today’s corporations are in the raw materials required for the mass electrification of energy, as the world shifts to net zero (something Trump rejects, of course) – copper, aluminiumand lithium – not to ment.
