By Matt Underwood Trump Cancels Second Attack on Venezuela, Cites Cooperation
The headline read that former President Trump had called off a second wave of attacks on Venezuela, and the reasoning given was an improvement in cooperation from the South American country. According to his Truth Social post, Venezuela was “working well” with the United States on rebuilding its oil and gas infrastructure, and also releasing a significant number of political prisoners. Therefore, another round of military action didn’t seem necessary, at least for now. This announcement immediately impacted the markets, with oil prices adjusting slightly. The move was particularly interesting given that the Trump administration was simultaneously pushing U.S. oil executives to get involved in rebuilding Venezuela’s energy sector.
Let’s be honest, the initial idea of an attack may have been rooted in several factors. While the official reason cited cooperation, some might speculate on the other potential motivations behind such a decision. One idea batted around was that it was about getting control of the Venezuelan oil, a valuable, yet complex resource. Venezuela holds vast oil reserves, but the oil quality is considered low, and the extraction and refinement process are complex. Venezuela’s current oil production is low, while the United States is capable of producing significant amounts domestically, largely of light crude. The U.S. also imports a substantial amount of oil, primarily heavy crude from Canada. While U.S. refineries have the capacity to handle significant amounts of oil, they tend to be optimized for lighter crude.
Further analysis reveals the complexity of the situation. The U.S. imports significant amounts of oil, but what’s available from Venezuela might not be the most straightforward solution. While it would take considerable time and investment to significantly boost production and create the infrastructure to refine and transport Venezuelan oil, the U.S. may still need to find a way to get the heavy crude. Setting up operations in Venezuela might be more cost-effective than a complete domestic refinery retooling. The political implications of such a move are, however, undeniable.
Why would the U.S. suddenly need more heavy crude, and indeed a long term guaranteed supply of heavy crude, no matter the cost? This question takes us to the heart of the matter: the need for heavy crude.
Some speculated the move was to gain control of a country the U.S. could effectively manage. One way to look at this is as a bargaining tactic. Begin with an aggressive stance, observe the reaction, and if you sense weakness, dial it back. Trump seemed to be using the threat of invasion to push Venezuela towards cooperation. This approach is reminiscent of a well-worn playbook: an initial aggressive position, followed by a negotiated “solution.”
The true rationale behind Trump’s actions might be a bit more complicated. It’s plausible that a second strike was never truly planned, serving only as a means to extract concessions. Some saw this more as an effort to distract from ongoing investigations and controversies.
Consider, too, the issue of international influence. China has a significant financial stake in Venezuela, loaning the country vast sums in exchange for access to its oil reserves. These loans, structured in a way that allows China to gain control of resources, are part of a broader strategy to influence the global oil market and secure its energy future. Trump’s involvement in Venezuela would limit China’s control, forcing it to compete for oil on the open market and potentially signaling a shift in the U.S.’s stance toward China’s growing global influence. In the longer term, the high sulfur content in Venezuelan oil offers opportunities, too. It enables the production of light mercaptans, key components for agricultural applications. The focus might also have been on securing the region as a means to limit the influence of both China and Russia in the Americas.