Trump is delusional about Venezuelan oil |
Trump is banking on Venezuela’s vast oil reserves to justify US intervention. But the state of the industry, global energy shifts and basic economics point to failure.
Trump’s delusions about the value of Venezuelan oil reserves are likely to destroy any chance of the US intervention in Venezuela proving successful.
The arrangements for the future governance of Venezuela over the next few years are still very uncertain. But one thing is certain, Trump is determined to take over Venezuela’s oil industry.
In a Truth Social post on 7 January, Trump announced that “the Interim Authorities in Venezuela will be turning over between 30 and 50 MILLION Barrels of High Quality, Sanctioned Oil, to the United States of America. This Oil will be sold at its Market Price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States!”
There is no doubt that Venezuela needs much more oil revenue if a stable democratic government is to be restored. And Venezuela has the largest oil reserves in the world. But since the Venezuelan Government took over its oil industry in 1999, production has fallen from 3.5 million barrels of oil a day to an average of about 1.1m barrels a day, due to corruption, US sanctions and state mismanagement.
As a result, in the last decade Venezuela has lost three quarters of its GDP, and the collapse in living standards must have played a major role in encouraging almost one quarter of the population to emigrate.
Nevertheless, although there is no doubt that Venezuela has plenty of oil in the ground, the critical questions are how much will it cost to restore the delivery capacity, what are the necessary administrative arrangements to support the restoration of that delivery capacity, how long will it take, and........