Introduction
American warships are already off the
coast of Venezuela. Trump speaks of narcotrafficking, but is that really the
whole story? Let’s break down what’s behind these maneuvers — and why oil is
once again carrying a risk premium.
Why Venezuela?
Venezuela holds the world’s largest
proven oil reserves — more than 300 billion barrels, surpassing even Saudi
Arabia. Yet its state oil company PDVSA has been crippled by years of
mismanagement, corruption, and US sanctions, leaving production stuck around
500,000 barrels per day — a fraction of its potential.
Still, Venezuela remains a crucial player
for global flows. China has become one of its biggest customers, keeping
Maduro’s regime afloat, bypassing sanctions with disguised shipments and barter
deals. This connection ties Caracas directly to Beijing’s energy security — and
gives Washington one more reason to turn Venezuela into a pressure point.
Rubio and the military escalation
The first strike came from US Secretary
of State Marco Rubio. The State Department calls Nicolás Maduro an illegitimate
president and the leader of the “Cartel of the Suns,” responsible for
narcotrafficking into the US and Europe. In August, Washington raised the
bounty for his arrest to $50 million, while the White House openly declared
that “any element of American military power” could be used against Caracas.
In response, Maduro announced a
mobilization and deployed around 15,000 troops to the Colombian border. At the
same time, US warships approached Venezuela’s shores, officially under the
banner of a counternarcotics operation. Caracas appealed to the UN and its
allies, calling for protection against American aggression.
Exxon vs. Venezuela — a long war
The conflict between Washington and
Caracas is not just about narcotrafficking. At its core lies oil. ExxonMobil
has been at odds with Venezuela for decades: the nationalization of its assets
under Chávez, multi-billion-dollar lawsuits in international courts, and
blocked investments.
In 2015, Caracas declared disputed
offshore waters as its own, including the Essequibo region claimed by Guyana.
Yet it was precisely there that Exxon secured a license from Guyana to develop
the giant Stabroek field.
Since then, Exxon has become one of the
regime’s primary irritants. Its survey vessels clashed with Venezuelan navy
patrols, including a 2018 incident. Every new drilling step triggered Caracas’s
protests — right up to its latest statements in 2025 against the launch of new
FPSOs. For Exxon, Maduro’s removal would mean not only revenge, but direct
access to billions of barrels in disputed waters. Production is already
underway under Guyana’s and Washington’s protection, but the case remains under
review at the International Court of Justice.
Trump and Exxon — interests align
For Donald Trump, ExxonMobil is not just
another oil major. It has long been a political patron of the Republican
establishment, pouring millions into campaign coffers and shaping Washington’s
energy agenda. Exxon embodies the very idea of “American energy dominance” that
Trump turned into a slogan during his first term.
The company’s feud with Venezuela is
personal: its assets were seized during Chávez’s nationalizations, it fought
billion-dollar battles in arbitration courts, and it has been locked out of the
world’s largest oil reserves for over a decade. An ouster of Nicolás Maduro
would flip the script. Exxon would gain direct leverage over disputed offshore
fields through Guyana’s licenses, while Washington could finally re-anchor
Venezuela in the Western energy order — pushing out Chinese buyers who have
been propping up Caracas with sanctions-busting deals.
For Trump, aligning with Exxon is more
than corporate loyalty. It means rewarding an ally, cutting Beijing off from
cheap crude, and proving that American gunboat diplomacy still works when
markets are at stake.
How markets react if the
situation escalates
For now, Venezuela is only adding a
modest risk premium. Brent has been trading with an extra $2–3 a barrel built
into prices, reflecting the threat of disruption. That’s manageable.
But the market calculus changes the
moment talk of a US special operation turns into action. A full-scale
intervention would not just freeze Venezuelan exports — it would destabilize
the wider Caribbean basin and raise questions about flows from Guyana, which is
ramping up to over 1 million barrels per day by 2027. In that scenario, traders
would start pricing in a geopolitical shock: a $10–15 spike in Brent is
realistic within days, pushing prices toward the $80 handle.
Brent is tightening into a breakout. The
$66 trendline is holding like concrete — as long as it stays intact, the bias
is higher. The nearest resistance sits at $70-71. If that level cracks,
especially under the headline of a US strike or “special operation,” the market
will flip from cautious to outright momentum. In that case, $79–80 is not just
a target — it’s the natural magnet. And if fear really spills over, the
extension points to $83+.
Europe would feel it in inflation, China in
industrial costs, and the US shale patch — along with Exxon — would stand to
gain. For markets, the real question is not whether Venezuela matters, but how
fast risk turns into price action once the first shot is fired.
Conclusion
Venezuela is no longer just a failing
petrostate on the periphery. With US warships on its doorstep, Rubio putting a
$50 million price tag on Maduro, and Exxon eyeing a return to the world’s
biggest oil reserves, the stakes have shifted. This is no longer about
narcotrafficking — it’s about who controls the flow of crude in the Western
Hemisphere.
For traders, the setup is simple: the
chart is coiled, the politics are explosive, and the first headline that
confirms military action could turn a slow market into a $10–15 melt-up. For
everyone else — from Brussels to Beijing— it’s another reminder that oil
remains the ultimate weapon of geopolitics.