On Tuesday December 16th 2025, US President Donald Trump announced via X that the US would be imposing an oil embargo on Venezuela, deploying its navy off the Venezuelan coast to prevent sanctioned oil tankers from exporting Venezuelan crude. Trump was cheered on by hawks in Washington, who argued that an embargo would heap yet more pressure on Maduro given his regime's near total reliance on oil revenues. Although we should note it'll probably exacerbate Venezuela's appalling economic crisis and the regional migration crisis emanating from the country.

Within that X post, however, Trump also seemed to claim that Venezuela had in some sense stolen America's oil and land. Unsurprisingly, this sparked some speculation that the real motive, or at least one of the motives behind Trump's pressure campaign against Venezuela, might be getting America's hands on Venezuela's enormous and relatively untapped oil supplies. .It's not the first time Donald Trump has made a similar proposition.

"In 2023, at a rally in South Carolina, Trump asserted that, "When I left, Venezuela was ready to collapse"We would have taken over. We would have kept all that oil." And in 2020, John Bolton, Trump's national security adviser between 2018 and 2019, claimed Trump told him that Venezuela was quote really part of the United States.

So, to understand why people think this is all really about oil, it need's a bit of context. In short, Venezuela has a lot of oil. Venezuela, for example, as stated by the EIA, now accounts for a weekly average of a million barrels a day at present. This would mean in perspective that it accounts for maybe a tenth of the three major major oil-producing nations: America, Saudi Arabia, and Russia. All three of them produce more than 10 million barrels a day. Venezuela would be only the 18th biggest oil-producing state in the world between the 17th-ranking Libya and the 19th-ranking Angola, both of whom have reserves smaller than Venezuela by a considerable margin.

Similarly, using CEIC figures, Venezuela's own exports amount to only 650,000 barrels per day, whereas that of Saudi Arabia stands at 6 million barrels per day and for Russia, 4.5 million barrels per day. Arising from Venezuela's enormous reserves, it firmly appears that Venezuela is not actually a major participant in this sector currently. Well, there are at least three factors that could account for this state of affairs. First, Venezuelan crude is actually rather heavy. For starters, crude oil, once drawn out from beneath the earth, is actually an unhelpful concoction of various different compounds that, in their raw state, are of little use at this point either. So, it is actually crude oil, which must be separated and further converted into usable petroleum products like gas and diesel. But not all crude oils are the same. Crude oils differ in their “viscosities” or “gravities.” Heavy crude oils are actually thick and gloopy, whereas those that are lighter are thinner in consistency. Crucially, however, it's actually much harder to refine and further separate “heavy” crude oils and their kind, particularly in high-demand petroleum products like gas and jet fuel. Unfortunately, this makes Venezuela's crude one of “the heaviest” in this particular world, and thus rather costly and hard to refine.

Second, the Venezuelan oil industry has been plagued by incompetent management. Venezuelan politicians and officials have long treated Venezuela's state-owned oil company, PDVSA, as a sort of corrupt piggy bank, extracting money from the company that should really either have been spent on improving Venezuela's public services or reinvested back into Venezuela's decrepit oil infrastructure. Third, sanctions haven't helped. Since really 2019, PDVSA has been under a strict US led sanction regime that has made it difficult for the company to tap international capital markets or export oil. Sanctions have obviously had a direct impact on Venezuelan exports, but they've also reduced PDVSA's oil production because the company can't really attract international capital to fund the necessary investments in Venezuela's oil industry.

Trump might be thinking that if the US essentially took over Venezuela's oil industry, whether by replacing Madura with a more pliant government or as Trump implied on Truth Social, literally claiming Venezuela's oil for the US, all these problems could be easily solved. The US could remove sanctions and provide capital for the much needed investments in Venezuela's oil infrastructure. The US could also help with refining Venezuela's inconveniently heavy crude. Many of America's oil refineries, especially those on the Gulf Coast, are actually designed to process heavy crude from countries like Mexico and Venezuela. This is why the so called shale boom in the US hasn't made the US energy independent, as both Obama and Trump claimed it would. Most of the oil produced in the US is produced via fracking and is generally very light.

Frustratingly for America, its refineries were set up to process heavier crudes from Western Hemisphere producers like Canada, Mexico, and Venezuela, which means that a lot of American oil is actually exported to be refined elsewhere. And the US still imports heavier crude from abroad to be refined and then consumed in the US. Revitalizing Venezuela's oil industry, would thus be good business for not just US super majors like Chevron, which have outstanding operations in Venezuela, but also American refiners. It would also probably bring down gas prices because more Venezuelan production means more oil supply and thus, all else being equal, lower oil prices. This would be great news for Trump domestically, given that lower prices at the pump would help tamp down inflation, which has become a real political vulnerability for Trump lately.

However, lower prices probably wouldn't be good for American producers. Global oil prices are already very low by historical standards. Until Trump announced his oil embargo, Brent crude futures were actually trading below $60 a barrel, the lowest they've been since the pandemic. Unfortunately, US producers need relatively high prices to turn a profit. Estimates vary, but most analysts generally think prices have been at about $60 a barrel for American shale producers to just break even. And there have already been a slew of reports suggesting US producers are tightening their belts. With the Energy Information Administration now predicting a drop in American output next year, this speaks to long standing tension in Trump's oil policy. Higher prices are good for America's domestic oil industry, which Trump's a big fan of, but unpopular with his voters who really don't like inflation.