Explaining Trump’s Oil Grab

Editor’s Note: The Trump administration has been explicit in its justification of its intervention in Venezuela, with the president and other officials stating plainly that the United States seeks to control Venezuela’s oil production. The U.S. Naval Postgraduate School’s Emily Meierding—author of “The Oil Wars Myth,” about how wars are not fought over oil access because of the high material and reputational costs—takes stock of the operation. She argues that the Trump administration has tried to minimize some of these costs, and miscalculated others—most notably, the willingness of U.S. oil companies to invest huge sums in a politically unstable situation.

Dana Stuster

***

Early last Saturday, the United States launched a military operation to seize Venezuelan President Nicolás Maduro and his wife, Celia Flores. Hours after Army Delta Force commandos completed their mission, President Trump held a press conference at Mar-a-Lago. To the surprise of most listeners, he identified oil as a leading motive for the raid. The United States was going to “take back the oil” that had been “stolen from us.” This would involve U.S. oil companies investing “billions and billions of dollars” in Venezuela’s oil industry and “taking a tremendous amount of wealth out of the ground.” In a subsequent Truth Social post, the president proclaimed that the United States will manage all Venezuelan oil sales and that he personally will control that revenue. Energy Secretary Chris Wright later added that U.S. management of resource sales will continue “indefinitely.” By all appearances, the United States has grabbed Venezuela’s oil.

The conventional wisdom holds that countries launch wars to secure oil resources on a regular basis. Advocates of this perspective cite a long list of precedents, from the Chaco War between Bolivia and Paraguay in the 1930s, through Japanese and German expansion during World War II, and Iraq’s invasion of Kuwait in 1990. However, as I argued in my book, “The Oil Wars Myth,” these conflicts had other motivations and the persistent belief that countries frequently engage in international oil grabs is false. Fighting to capture oil resources is a losing proposition, and governments know this. 

Countries refrain from launching international oil grabs because of four sets of obstacles: invasion costs, occupation costs, international costs, and investment costs. Invasion costs are the destruction that wars can wreak on oil industry infrastructure. Occupation costs arise when local populations resist foreign control of their oil industry, through armed resistance against the occupier’s forces or interference with oil industry operations. International costs are imposed by third parties, including other countries and international organizations, which can respond to aggression with diplomatic censure, economic sanctions, and military interventions. Investment costs refer to the challenges of attracting foreign capital to oil projects when political authority is uncertain. Collectively, these four sets of costs dramatically reduce the appeal of fighting for oil and the likelihood of international oil wars.

These four sets of costs provide insights into why the Trump administration intervened in Venezuela and how the attack was conducted. First, by limiting the scope of its operation to strikes on Maduro’s presidential compound, radar and air defense systems in Caracas, and a relatively small number of strategic targets outside the capital, the administration avoided invasion costs. The operation caused no damage to Venezuela’s oil industry. Second, by positioning U.S. military forces offshore, the United States moderated occupation costs. With no U.S. boots on the ground and no U.S. Embassy in Caracas, there are few targets for local opponents.

Third, the United States’s exceptional military power has rendered international costs irrelevant. Many third parties have criticized Saturday’s raid. France’s deputy ambassador to the United Nations observed that the operation “runs counter to the principle of peace dispute resolution and runs counter to the principle of non-use of force.” The Chinese Foreign Ministry condemned the United States’s “blatant use of force against a sovereign state,” and Brazilian President Luiz Inacio Lula da Silva declared that “[t]he bombings on Venezuela’s territory and the capture of its president cross an unacceptable line.” Yet no third-party critics will forcefully challenge the United States, and, with the exception of China, none could impose very consequential economic sanctions. China’s economic interests in Venezuela, including its oil purchases, are not important enough for Beijing to risk intensifying its trade war with the United States.

The fourth set of obstacles—investment costs—do still matter in this case. President Trump claims that U.S. oil companies are eager to invest in Venezuela’s oil industry. As he put it on Jan. 5, “They want to go in so badly.” However, leading U.S. companies have expressed far less enthusiasm for the idea. A spokesperson for ConocoPhillips stated that “it would be premature to speculate on any future business activities or investments” in Venezuela. Chevron’s public communications have focused on the security of its existing operations. Exxon Mobil’s CEO noted before Maduro’s capture that “[w]e’ve been expropriated from Venezuela two different times ….We’d have to see what the economics look like.”

Venezuela’s oil industry is in a state of disrepair due to two decades of mismanagement, corruption, physical decay, and, more recently, U.S. sanctions. The country currently produces fewer than 1 million barrels of oil per day, down from the more than 3 million barrels per day it produced 20 years ago. Restoring its former output will cost an estimated $100 billion over the next decade. Meanwhile, oil prices are low and U.S. oil companies are accountable to shareholders who have tightened the reins on capital expenditures since the oil price crash in 2020.

These companies will withhold significant investments in Venezuela until the country and its government are stable. The government will also need to change national investment laws to be more welcoming to foreign capital, including by strengthening private property protections and the rule of law. Even then, Venezuelan leaders will face a catch-22. The attractive contract terms they will have to offer to entice such large, long-term investments could provoke domestic opposition. Venezuelans view oil revenue as their birthright. If foreign oil companies start taking the lion’s share of it—especially under the perceived direction of the U.S. government—they will resist, undermining political stability. Oil infrastructure will be an easy target for local opponents—another deterrent to wary investors.

The Trump administration seems to have devoted little consideration to these investment obstacles before launching Saturday’s raid. As others have noted, the president’s perspective on natural resources seems to be anchored in the early 20th century, not the early 21st. In 1926, it was economically and normatively viable for an outside power to fully control another country’s oil resources, through direct imperial authority or 99-year concessions agreements. In 2026, it is not.

While the Trump administration has been attentive to some of the costs of the conflict it has launched, it clearly has underestimated the investment costs. One potential problem with theorizing that the costs of oil wars deter their initiation is the assumption that leaders are rational—in the sense that they are fully aware of and give due consideration to the costs and benefits of foreign policy decisions. In this case, the limited scope of the Venezuela operation suggests that the Trump administration considered invasion and occupation costs. A Bloomberg analysis supports this interpretation, noting that officials wanted to avoid the “chaos that ensued in Iraq after the fall of Saddam Hussein.” However, officials’ proposed plans for managing Venezuela’s oil suggest an ignorance of investment costs. This has led the Trump administration to overestimate the oil-related benefits the United States will receive from Maduro’s removal.

Regardless of the material costs, it is shocking that the United States, the country that led the creation of the postwar rules-based international order, would violate one of its core principles—the norm against conquest—explicitly for oil. During the lead-up to the 2003 invasion of Iraq, Bush administration officials repeatedly, adamantly insisted that the war was not an oil grab. Although it’s easy to doubt their sincerity, the fact remains that the occupation government did not take over Iraq’s oil industry. Iraqis remained in charge of resource management decisions, and the Iraqi government subsequently established extremely restrictive laws on foreign participation in oil projects, contrary to the Bush administration’s preferences. Until now it had seemed that future U.S. administrations would, if anything, be less likely to embark on—or publicly advertise—international oil grabs.

The intervention in Venezuela may be an outlier; this would be best, both for the sake of my theory and, more importantly, for global stability. I suspect that it is, for multiple reasons. First, while oil was one motive for the raid, Trump administration officials had other goals, including removing an amoral and illegitimate leader, demonstrating U.S. power, pressuring Cuba, limiting immigration to the United States, and advancing the National Security Strategy’s goal of reinforcing U.S. dominance in the Western Hemisphere by expanding U.S. authority and pushing out competitors. Although President Trump has identified other potential targets for U.S. expansion, including Greenland, none of them advances so many ambitions. Second, in other places, the United States could expect stronger international resistance.

That being said, one thing that is clear from the history of resource competition is that beliefs about natural resources are very powerful and very difficult to change. If leaders believe they can achieve resource security through nonmilitary actions—developing resource substitutes, exploiting domestic reserves, or international trade—they will refrain from forcefully seizing foreign resources. However, if they believe that conquering resources pays—despite abundant evidence to the contrary—there could be more international resource grabs in the not-so-distant future.