US-Venezuela Tensions: Trump’s $100 Billion Oil Bet.

In a theatrical turn to the US relations with Venezuela, Donald Trump has declared that big American oil companies are ready to spend no less than 100 billion dollars to re-establish the shattered oil system in Venezuela. In a high-profile speech at the White House following an executive meeting with international energy players, Trump, while explaining the move as an economic opportunity, a strategic necessity one that can reform global oil markets, stabilize Venezuela, and advance US energy supremacy.

This is announced after ousting and arresting of the Venezuelan leader Nicolas Maduro, a move that has changed the political dynamics of Caracas radically. As Venezuela is the largest proven reserves of oil in the world, the Trump administration sees an opportunity to recover the production capacity and to declare American control over the flow and distribution of Venezuelan crude.

US-Venezuela Tensions: Trump’s $100 Billion Oil Bet-An Ambitious Statement: Energy Business, Not War.

During the White House meeting, Trump claimed that the oil collapse in Venezuela was not caused by shortage of resources, but by decades of mismanagement, corruption and sanctions. Combined, he said, we have 55 percent of the oil in the world, and rebuilding the oil infrastructure in Venezuela would open millions of barrels a day to the global markets.

US-Venezuela Tensions: Trump’s $100 Billion Oil Bet- Instead of becoming more military active or using sanctions, Trump advocated energy commerce, as he termed it. The scheme will be based on the premise that some of the US and foreign oil corporations will be given permission to work in Venezuela, but the security is guaranteed by the US government. Most importantly, Trump observed that the businesses would have direct interactions with Washington, rather than the Venezuelan officials- a system that highlights how strictly the administration would like to regulate the process.

US-Venezuela Tensions: Trump’s $100 Billion Oil Bet-Who’s In? Big Oil Steps Forward

The number of people at the White House highlighted the magnitude of the initiative. Others who attended include executives of Chevron, ExxonMobil, ConocoPhillips, Halliburton, Shell, Repsol, Eni, marathon, Valero, Trafigura and Vitol Americas.

US-Venezuela Tensions: Trump’s $100 Billion Oil Bet- The Chevron Vice Chairman, Mark Nelson emphasized that his company has been in Venezuela a hundred and more years, this has provided the company with strong institutional understanding of the oil fields and labor force within the country. ExxonMobil CEO, Darren Woods, whose corporation left Venezuela almost 20 years ago, indicated that he is willing to come back, on a condition that the long-term legal immunity and the security guaranties are put in place.

In the case of such companies as ConocoPhillips, there is the moment of opportunity as well as the moment of caution. CEO Ryan Lance reminded that his company had written off 12 billion dollars when Venezuela nationalized foreign oil reserves under the previous president Hugo Chavez. The promises made by Trump are aimed at assuring such companies that this time is different.

US-Venezuela Tensions: Trump’s $100 Billion Oil Bet-Jobs, Infrastructure and Venezuelan Workers.

Though Americans experience and capital will be in the forefront of reconstruction, Trump emphasized that the bulk of employment would be on the Venezuelans. Not only will the reinstatement of oil production offer hundreds of thousands of skilled local workers, already accustomed to the extraction and refining process, livelihoods since unemployment is at crisis levels, but it will also create jobs for tens of thousands of them.

However, the process of rebuilding the oil industry in Venezuela is not that trivial. The neglect over the years has resulted in decrepit refineries, corroded pipes and hardly operational export terminals. According to industry analysts, it may take five or ten years before the country can recoup half of the historic output in Venezuela despite the huge investment.

US-Venezuela Tensions: Trump’s $100 Billion Oil Bet-Borders, Oil Prices and Global Power.

Trump has on numerous occasions associated a rise in the production of Venezuelan oil with the decrease in the cost of gasoline to the American market. With more supply, presumably flooding the market, the administration expects to reduce the force of inflation and dilute the bargaining position of competitors to the production process.

In addition to the economic aspect, Trump also linked the program with border security and curbing crime by the fact that a stabilized economy in Venezuela will curb drug trafficking as well as illegitimate migration into the United States. He argued that the intervention was also necessary because of geopolitics, such that China and Russia were ready to increase their influence in Venezuela unless the US took decisive action.

US-Venezuela Tensions: Trump’s $100 Billion Oil Bet- US Control Over Oil Revenues.

The US Energy Department states that every single penny earned by the sales of Venezuelan oil will first be under the control of the US government and distributed to benefit the American interests as well as Venezuelan reconstruction. Selective lifting of sanctions to permit oil export, and Washington retains control over contracts, logistics and revenue streams.
Venezuela has already sold 30 million barrels of oil, worth an approximate of 4 billion, to the United States. Another accord gives the US a chance to start refining and selling up to 50 million barrels of Venezuela crude which may be based on an indefinite basis.

Caracas Fallout on Politics.US-Venezuela Tensions:

It is all developments that have further thrown Venezuela into political uncertainty. Maduro and his wife Cilia Flores won’t be found guilty of federal charges of drug trafficking, cooperation with terrorist-designated gangs, and others after being apprehended in Caracas and taken to New York, pleading not guilty. In the meantime, the parliament of Venezuela has inaugurated Delcy Rodriguez as acting president although her mandate is still in dispute.
Trump justified the military operation that resulted in the arrest of Maduro by claiming that it was appropriate to avoid the situation when hostile powers could establish the foothold in the Western Hemisphere.

US-Venezuela Tensions: – An international Gamble With Global Consequences.

One of the most audacious energy and foreign policy bets during the US history is the $100 billion oil bet Trump made on Venezuela. In case it is successful, it would re-energize a failed petrostate, re-arrange the oil flows in the globe, and solidify American control in the energy landscape of the Western Hemisphere. In case of failure, it will provoke a new political crisis, legal challenges and global recoil.
This is what is evident; Venezuela, a long time a symbol of wasted prosperity and political instability, is once again in the spotlight of international politics of power. Oil is not a commodity in this case, it is the foundation of a new geopolitical strategy.

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