Cabimas, Venezuela, oil pump jack is seen at dawn in oil field. (Photo by: Jose Bula Urrutia/UCG/Universal Images Group via Getty Images)
UCG/Universal Images Group via Getty Images
President Trump has announced a significant agreement granting the U.S. government, specifically the Pentagon, a direct stake in key Venezuelan oil fields. The President declared on Truth Social, “This Historic Transaction MORE THAN DOUBLES American Oil Reserves, greatly increases our Oil Supply, and will substantially lower Gas Prices for all Americans, long into the future.”
The arrangement is highly unconventional. The Pentagon holds a 35% stake in North American Blue Energy Partners, a firm managed by an associate of Venezuelan President Delcy Rodríguez. However, stakeholders should not expect a rapid influx of Venezuelan oil—certainly not as quickly as the administration anticipates.
This is because few combinations are as politically volatile as nationalism and oil.
Consider Mexico’s historical precedent: in 1938, the nation nationalized 17 foreign oil companies operating within its borders. Mexicans viewed this seizure as a declaration of independence, and the date—March 18th—remains a national holiday.
Driven by similar nationalist fervor, other nations have followed Mexico’s lead. In 1953, a pro-communist government in Iran nationalized the British-controlled oil industry. This action precipitated a coup—widely attributed to the CIA and its British counterpart—which restored the deposed Shah Mohammed Reza Pahlavi to power. Decades later, the Islamic revolutionaries who ousted the Shah in 1979 cited this oil nationalization as a primary justification for seizing control.
On the surface, Venezuela’s government is striking a deal with a supposedly independent company in which the U.S. holds less than a 50% stake. However, the political reality is that both Venezuelan political forces and international observers view this as a U.S. takeover, particularly given the Pentagon’s financial interest in the entity.
The current unelected President Rodríguez leads an unpopular and widely illegitimate government. Former dictator Nicolás Maduro agreed to hold elections in 2024 to ease American sanctions, but he barred popular opposition candidate María Corina Machado from the race. Machado endorsed a surrogate who won overwhelmingly; however, Maduro, who controls the military and police, manipulated the vote counting and brazenly declared himself the victor.
As Venezuela’s leading democratic advocate, Machado was forced into hiding to avoid arrest or assassination by Maduro’s regime. She was subsequently awarded the Nobel Peace Prize for her resilience.
Following President Trump’s dramatic seizure and arrest of drug kingpin Maduro, many assumed Machado would return to power once honest elections were swiftly held. Instead, the Trump Administration chose to engage with the discredited Rodríguez, who had been Maduro’s obedient subordinate.
The U.S.-overseen process of returning to democracy has progressed at a glacial pace. With remarkable shortsightedness, the Trump team has sidelined the popular Machado. Consequently, it is hardly surprising that this oil deal has triggered a wave of opposition across the political spectrum.
Legitimate oil industry giants remain reluctant to unleash the massive investments required to revive and expand Venezuela’s immense oil resources until they can trust the governing institutions and the regulatory framework. This explains why oil output remains low despite Maduro’s ouster.
Regardless of the deal’s outcome, it establishes a troubling precedent of the U.S. government taking direct, socialist-like stakes in private enterprises—a move that has not gone unnoticed by far-left Democrats.
