Three Reflections on the Venezuela Incident

Hong Chaowei

U.S. media recently revealed that the United States has completed the sale of the first batch of Venezuelan oil, with a transaction value of 500 million U.S. dollars. This marks the first time that the U.S. measures to deal with Venezuela's oil resources have come into public view since the U.S. military strike on Venezuela on January 3 and the forced control of President Maduro. Although the Trump administration has loudly announced its intention to mobilize one hundred billion U.S. dollars to "rebuild" Venezuela's energy industry, this plan has already been questioned by U.S. energy giants. The U.S. act of acquiring another country's resources through military means and forcibly converting them into cash not only faces legal and commercial difficulties, but also brings uncertainty to the global oil market.

According to data from the OPEC "2025 Statistical Bulletin," Venezuela has the world's largest proven crude oil reserves, accounting for 19.35% of the world's proven oil reserves, far exceeding Saudi Arabia, which ranks second in the world. However, due to factors such as aging infrastructure and long-term sanctions, Venezuela's oil production is currently at a low level, which is seriously mismatched with its reserve status.

In the short term, the U.S. move has a relatively limited impact on the global oil market. According to the World Bank's "Commodity Market Outlook" report released in October 2025, global oil production has surged while consumption growth has been weak, leading to an oversupply of global oil. Currently, the share of Venezuela's oil output in the global total is relatively low. According to data from the OPEC report, in 2024, Venezuela's oil production accounted for about 1% of the global total, far lower than the output of major oil-producing countries such as the United States, Russia, and Saudi Arabia. Therefore, changes in its supply have a relatively limited impact on the international oil market.

In the long term, the impact of the U.S. move on the global oil market still needs further observation. On the one hand, whether the U.S. can truly rebuild Venezuela's oil capacity remains a challenge. In recent years, Venezuela's domestic oil production capacity has been greatly weakened due to sanctions, lack of investment, and brain drain. First, the so-called "reconstruction" lacks a legal basis. The principle of permanent sovereignty over natural resources in international law clearly stipulates that sovereign states have the inherent right to control, use, and dispose of their own resources to achieve their own development. Second, the investment environment and commercial feasibility are questionable. The stability of domestic policies, legal guarantees, and business environment in Venezuela are still unclear, which will greatly restrict companies' willingness to invest. From historical experience, intervening in the development of other countries' resources through military means is often accompanied by long-term political instability and social risks, which will further increase the difficulties of enterprise operations. Recently, President Trump held a special meeting on oil investment at the White House, and the attitudes of major oil companies were generally cautious. Third, rebuilding Venezuela's oil industry requires decades of effort and substantial investment. Cost and returns will be important considerations for corporate investment behavior.

On the other hand, the global energy transition process also brings uncertainty to the future of the oil industry. First, under the background of the global energy transition, the demand for oil may decrease. According to the International Energy Agency's "World Energy Outlook 2025" report, one of the simulated scenarios suggests that due to the impact of the global energy transition, by 2035, the share of electric vehicles in new car sales will exceed 50%. Oil demand will slowly decline. According to the forecast, Venezuela's production may recover around 2040. Under the background of the future green revolution lowering oil prices, enterprises' investments may face risks. Second, if the U.S. promotes the enhancement of Venezuela's oil production capacity, it may reshape part of the international crude oil trade pattern. Overall, the U.S. has a high oil production, but there are structural contradictions. In recent years, the proportion of heavy crude oil imports in the U.S. has increased significantly, mainly from Canada. If the U.S. increases its oil production in Venezuela in the future, it may help it reduce its single dependence on Canadian heavy crude oil, and overall, it will have some impact on the oil supply of countries such as Canada, Russia, and Saudi Arabia.

The actual impact of the U.S. action on the global oil market may be limited, but its impact on global energy governance is more profound. The U.S. action severely undermines the basic principles of international relations based on the purposes and principles of the UN Charter. In addition, the U.S. recent blatant desire for key minerals in countries and regions such as Canada and Greenland may trigger a widespread "chilling effect": on one hand, it leads to an increased sense of insecurity among resource-rich countries regarding resource sovereignty; on the other hand, the U.S. using power to break the international order based on international law will weaken the trust of resource-rich countries in international energy investment and trade rules.

This incident once again shows that energy security and geopolitics are deeply intertwined; it also provides important insights for resource-rich countries' development. First, actively safeguarding resource sovereignty, protecting resource sovereignty through improving domestic laws and participating in international agreements, and avoiding excessive external interference; second, promoting economic diversification, increasing participation in the global value chain, promoting economic transformation, and reducing excessive dependence on a single resource; third, adhering to multilateralism, actively participating in global governance, enhancing the voice and representation of developing countries, and jointly curbing unilateral bullying actions. (Author: Deputy Researcher of the Institute of Latin American Studies, Chinese Academy of Social Sciences)

US forces capture the president of Venezuela

Original: toutiao.com/article/1854488319280131/

Statement: The article represents the views of the author himself.