Century of Oil: How US-Venezuela Ties Shifted From Partnership to Control

A declassified memo from 1950 sits in the State Department archives with a blunt assessment: every policy Washington crafted toward Venezuela, in greater or lesser measure, served a single purpose—securing oil for American consumption. "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," the document stated, stripping away diplomatic language to name the transaction at the heart of the relationship. Seventy-six years later, that same calculus remains unchanged, only now the machinery of control has become visible in ways that memo's authors might have only imagined.

Venezuela held the world's largest known oil reserves, a fact that shaped every major decision Washington made about the country across the twentieth century. During World War II, Venezuelan crude kept American planes, ships, and tanks moving. In the decades that followed, the relationship appeared stable—US energy companies operated the fields, extracted the wealth, and profited enormously while the Venezuelan state collected its share. It was a partnership, or at least it looked like one from Washington's perspective.

That arrangement fractured in 1999 when Hugo Chávez took power. A self-described socialist and anti-imperialist, Chávez began making oil deals with China, Iran, and Russia, pivoting Venezuela away from Washington and toward Moscow and Beijing. When a military faction briefly detained him in 2002 after a violent crackdown on protests, Chávez accused the United States of orchestrating the coup attempt—a charge that poisoned the relationship further. In 2007, Chávez moved decisively to reclaim control of the oil fields themselves. The state company took majority ownership of the reserves; foreign firms were offered minority stakes instead. ExxonMobil and ConocoPhillips refused the terms and were effectively expelled. Only Chevron, the second-largest American oil company, agreed to the reduced arrangement and remained. The two companies that left spent years in legal battles seeking compensation; the World Bank's investment tribunal awarded them billions, but Venezuela never paid in full.

When Chávez died in 2013, Nicolás Maduro, his former foreign minister and a bus driver by trade, inherited the presidency and continued the antagonistic stance toward Washington. Maduro's rule became increasingly authoritarian. The United Nations documented more than 20,000 extrajudicial killings under his watch. The judiciary eroded. The rule of law collapsed. The US imposed sanctions, which compounded corruption and accelerated economic decline. Maduro deepened ties with Moscow and Beijing instead, sending roughly 80 percent of Venezuela's crude oil to China as repayment for earlier loans, often at prices far below market value.

Donald Trump entered his second term determined to remove Maduro from power. He accused the Venezuelan leader of trafficking drugs and stealing American oil—a reference to Chávez's nationalization decades earlier. In July 2025, Washington placed a $50 million bounty on Maduro's head, calling him one of the world's largest drug traffickers, a characterization experts say lacks evidence. The administration launched airstrikes against alleged traffickers in the Caribbean, seized Venezuelan tankers, and built up military presence in surrounding waters. In November, Trump issued an ultimatum: step down and accept safe passage out of the country, or face the consequences. Maduro refused, telling his supporters he would not accept "a slave's peace" and accusing Washington of wanting to seize Venezuela's oil reserves.

In January 2026, US forces conducted a pre-dawn raid on Caracas. They captured Maduro and his wife, Cilia Flores, both now on trial in New York. The operation was the final rupture in a relationship already fractured beyond repair. Venezuela's new acting president, Delcy Rodríguez, initially denounced the capture as a kidnapping but soon signaled willingness to negotiate with Washington. Within months, the negotiation bore fruit. In August, after secret talks, Trump announced what the White House called "the biggest oil deal in world history." The United States would take majority control of roughly one-fifth of Venezuela's oil reserves, securing what officials described as American energy dominance for the next century.

The agreement granted Washington what the White House termed "powerful governance rights" over the reserves. A press release claimed private-sector growth would drive democratic transition in Venezuela, though few in Caracas expected that outcome. Rodríguez found herself defending the deal against accusations that she had surrendered the nation's natural resources to a foreign power. Francisco Rodríguez, a prominent Venezuelan economist, called the arrangement "predatory" and said it was "done at gunpoint." He wrote that Washington's actions had transformed Venezuela into "a protectorate in all but name," and warned that attempts to govern a country from an imperial capital had failed before and would fail again. The 1950 memo's cold assessment of American interest had become, in the end, the explicit architecture of control.