The US and Venezuela: a century-old relationship drenched in oil

A Century-Old Strategic Reliance on Venezuelan Crude

The deep and often turbulent connection between Washington and Caracas has long been anchored by petroleum extraction. A mid-century Department_of_State memorandum outlines the underlying motive directly, noting that all US policies toward Venezuela are affected in greater or less degree by the objective of assuring an adequate supply of petroleum for the US, according to Theguardian. Home to what are recognized as the world’s largest known oil reserves, Venezuela historically supplied essential fuel to allied planes, ships, and tanks during the second world war.

For decades following the global conflict, bilateral cooperation allowed US energy companies to operate extensively within the South American nation while extracting immense profits. That partnership shifted dramatically in 1999 when Hugo Chávez assumed the presidency. Positioning himself as a socialist and anti-imperialist, Chávez redirected oil deals toward China, Iran, and Russia, transforming Venezuela into a declared adversary of Washington alongside Cuba.

Nationalization Under Hugo Chávez and Corporate Fallout

Tensions escalated further in 2007 when Chávez initiated a sweeping wave of nationalization across the country’s oilfields. While previous administrations allowed foreign corporations to manage extraction operations, the new terms compelled foreign energy firms to accept minority stakes while granting state-owned enterprises majority control. Among major US operators, Chevron accepted the revised conditions and maintained a presence in the country.

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In contrast, ExxonMobil and ConocoPhillips rejected the terms and were pushed out of the industry entirely. Those two companies subsequently pursued years-long legal battles seeking compensation. Although the World Bank’s international centre for the settlement of investment disputes ordered billions of dollars in awards, Venezuela never paid the full amount. Despite the nationalization push, foreign companies from Europe, the UK, China, and Russia continued active roles in developing regional infrastructure.

Maduro’s Rise, International Isolation, and Chinese Debt Repayment

Following the death of Hugo Chávez in 2013, Nicolás Maduro succeeded him in power. The former bus driver and foreign minister maintained an antagonistic stance toward Washington. Under Maduro’s administration, domestic institutions eroded significantly; a 2019 UN estimate indicated that more than 20,000 Venezuelans died in extrajudicial killings as the rule of law degraded.

A Washington-led sanctions campaign compounded widespread internal corruption, severely damaging the national economy. Prior to a US-imposed blockade in December, approximately 80% of Venezuela’s crude oil production was exported to China. As Theguardian reports, China, functioning as the world’s largest oil importer, accepted these shipments at low prices as repayment for previous loans extended to Caracas.

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Seizure of Leadership and Recent US Energy Dominance Deals

During his second term, Donald Trump repeatedly urged the removal of Maduro, accusing the administration of facilitating drug trafficking and illicit migration—claims that experts note lack evidence. In July of the previous year, Washington instituted a $50m bounty on Maduro, designating him among the world’s premier drug traffickers.

Following a brazen night-time kidnapping of the Venezuelan leader, Trump announced that the United States is assuming majority control over roughly a fifth of the country’s oil reserves. According to statements from the White House cited by Theguardian, the newly arranged agreement secures our energy dominance for the next century.