President Donald Trump’s deadly invasion of Venezuela and kidnapping of its president could be an unusually clear example of “blood for oil.” The president has nearly said as much himself. But one hitch is that Houston’s oil giants don’t immediately appear eager to buy what Trump is selling.
Following the administration’s military coup, Trump suggested he may go so far as to use U.S. tax dollars to directly reimburse the nation’s largest oil firms for the billions they’d need to invest to repair and modernize the South American country’s dilapidated oil and gas infrastructure. The offer ups the ante on officials’ previous pledge, made in the days running up to the seizure of Nicolás Maduro, to compensate Big Oil firms for assets previously nationalized by the Venezuelan state in exchange for the companies’ investment.
White House officials, including Energy Secretary and former fracking executive Chris Wright, are set to meet again with executives of ExxonMobil, ConocoPhilips, and Chevron—three Big Oil companies all headquartered in Houston—on Friday to discuss further incentives to cajole them to open their pocket books in Venezuela.
On Tuesday, Trump announced the United States is receiving between 30 and 50 million barrels of blockaded Venezuelan crude stranded in oil tankers and storage facilities—about two days’ U.S. supply—as part of a move to both choke off exports to China and increase pressure on interim president and former oil minister Delcy Rodríguez to give U.S. oil firms what Trump has called “total access” to Venezuela’s oil fields.
But Venezuela’s long history of countering U.S. imperial oil adventurism and sanctions—and resulting political instability—goes a long way toward explaining why Big Oil firms need such incredible assurances to entice them back into the country that hosts the globe’s largest proven oil reserves.
Standard Oil of New Jersey, which would later become ExxonMobil, began its involvement in Venezuela during World War I, with Chevron and Gulf Oil later following suit. Despite Standard’s best efforts to combat increasing moves toward oil-worker unionization and industry nationalization, U.S. companies were forced to begin divvying up their profits with the government in the early 1940s after Venezuelan President Eleazar López Contreras’ signing of the Hydrocarbons Law.
Venezuela played a formative role in the creation of the Organization for Oil Exporting Countries (OPEC) in 1960, and by 1976 President Carlos Andrés Pérez had nationalized Venezuela’s oil industry. Still, Andrés Pérez left an opening for U.S. involvement by allowing Exxon, Conoco, and Chevron to operate jointly with Petróleos de Venezuela, S.A., the nation’s new state-owned oil company, known as PDVSA.
Luis Duno-Gottberg, the Lee Hage Jamail Professor of Latin American Studies at Rice University, told the Texas Observer in an email that those loopholes left detrimental operational practices, foreign partnerships, and technological dependence largely in place, rendering “nationalization more administrative than transformative”—critiques that resurfaced under President Hugo Chávez.
Nicolás Maduro in 2024 (Shutterstock)
Chávez restructured PDSVA after his political opposition led a general strike at the state oil company following military dissidents’ aborted 2002 coup attempt that ousted Chávez for two days before he was swiftly returned to power. Following the 2002 strike and putsch, Duno-Gottberg says Chavez raised oil royalties and taxes and restructured PDVSA’s management, redirecting oil revenues toward domestic social priorities, including health, education, and poverty reduction. Chavez further limited private participation in 2007, mandating that all oil ventures relinquish majority ownership to PDVSA. That’s when Exxon and Conoco jumped ship, and their assets were turned over to the state.
Duno-Gottberg told the Observer that U.S. sanctions and Chavez’s restructuring of PDVSA is a major reason why Venezuela’s oil industry fell into disrepair. The 2002-03 oil strike, and Chavez’s response, exemplifies the way oil has been used as both political weapon and tool, he said. The strike led to the dismissal of thousands of experienced engineers, managers, and operators, effectively “draining the state oil company of institutional memory and technical capacity,” Duno-Gottberg said; at the same time when Chávez’s opponents were attempting to stymie production to strong-arm political change.
“Over time, corruption, weak management, and rigid controls became entrenched, and later U.S. and international sanctions further restricted access to capital, spare parts, and export markets,” Duno-Gottberg told the Observer. “The cumulative effect was clear: declining production, rising accidents, and a system held together by improvisation rather than expertise, until what had once been one of the world’s most professional oil industries could no longer reliably sustain itself.”
That’s why Exxon and Conoco, at least, are likely to require more assurances from the Trump administration to mitigate against the political risks of a venture with a long history of expropriations, legal disputes, shifting rules, and political instability.
Beyond politics, the economics may also make little sense: There is already a global oil glut from OPEC+ countries, including Venezuela, and there’s no telling whether prices will rise enough to make upgrades, which will take years, profitable. In fact, Trump’s Tuesday acquisition of Venezuela’s stranded barrels tanked gas prices, already the lowest they’ve been since at least March 2021, even further. The average cost of a U.S. barrel fell to $56 and the average retail price per gallon remains $2.81, according to AAA.
Moreover, Venezuelan oil is heavy enough that it’s comparable to Canadian tar sands, making it costly to extract and refine due to the need for diluents. Only a small number of Houston refineries are properly equipped to handle it. Neighboring Guyana’s crude, meanwhile, is considered light and sweet, on par with that of Texas’ Permian Basin. As Amy Westervelt has pointed out, Trump’s toppling of Maduro more likely works to shield Exxon’s interest in Guyana, where Maduro had been aggressively staking claims, than to persuade the company to immediately re-enliven Venezuela’s playing fields.
Exxon CEO Darren Woods told Bloomberg in November that, “We’ve been expropriated from Venezuela two different times,” in response to a question about whether the company would tap Venezuela’s oil. “We’d have to see what the economics look like.”
But the economics might not be a problem for at least one Houston oil major. Chevron made an altogether different bet after Chávez closed Venezuela’s oil fields to private participation in 2007. Choosing to manage political risk instead of flee, Chevron remains the only U.S. oil company involved in Venezuela, benefitting from a special license that has allowed it to get around U.S. sanctions. The company’s operations currently account for about 17 percent of Venezuela’s current extraction.
Chevron released a statement almost immediately after the news of Maduro’s capture, signaling its willingness to fully back Trump’s naked imperial oil grab. “With more than a century in Venezuela, we support a peaceful, lawful transition that promotes stability and economic recovery,” the company said. “We’re prepared to work constructively with the U.S. Government during this period, leveraging our experience and presence to strengthen U.S. energy security.”
Environmental lawyer and human rights activist Steven Donziger knows a thing or two about Chevron’s track record in Latin America. Chevron withdrew its assets in Ecuador after European courts awarded Donziger’s clients—Indigenous tribes and farmers—$9.5 billion in damages for Texaco’s environmental devastation of the Amazon Rainforest. Chevron, which acquired Texaco in 1999, refused to pay the settlement and, through its law firm Gibson, Dunn & Crutcher, sued Donziger for allegedly obtaining the Ecuadorian ruling by means of racketeering.
The decades-long legal battle ultimately landed Donziger in federal prison and on house arrest after a separate, Chevron-connected law firm was appointed to prosecute him for allegedly violating court orders in a contempt-of-court case presided over by a Chevron-funded Federalist Society member.
Chevron, Donziger told the Observer, is in the best position to exploit the administration’s imperialism. “In a weird way, it could really happen, because the Maduro government—Delcy Rodríguez and the new current leadership—it’s in their interest to generate revenue too, right?”
Still, he said, even for Chevron, Venezuela’s oil fields are a longer-term play given the amount of risk and uncertainty.
“Chevron will be the leader and the most astute operator in this ever-changing, very dynamic playing field. They’re good at this. … There’s a reason they’re the only company in Venezuela. There’s a reason that they got away with mass environmental ecocide in Ecuador,” Donziger said. “They’ll be right there at the forefront, but it’s complicated.”
Downtown Houston (Matt Patterson via AP)
Both Donziger and Duno-Gottberg see the Trump administration’s oil grab as more about keeping Venezuela’s reserves from Cuba and China, while reasserting U.S. hegemony over the Western hemisphere, than pure profit-seeking. After all, before his capture, for instance, Maduro had already offered Trump a majority stake in both his country’s oil and mineral reserves.
“When Venezuela signaled a willingness to deepen trade in Chinese currency and further integrate with China, it touched a much larger nerve than barrels per day,” said Duno-Gottberg. And the move may also allow the Trump administration to assert additional pressure on Mexico, Colombia, and Greenland.
What’s largely lost in all this, of course, is the fact that the world still faces a climate emergency that is being fueled by the very resource the Trump administration is so determined to plunder. In fact, new climate data shows 2025 was one of the three hottest years on record—becoming the first year that global average temperatures broke the Paris Agreement’s threshold of 1.5 degrees Celsius above preindustrial levels.
Venezuela’s current extraction rates account for at least 0.4 percent of greenhouse gas emissions, and its untapped reserves effectively amount to yet another climate bomb at a time when the International Energy Agency has warned against any new investment in oil and gas infrastructure.
Funneling Venezuela’s oil reserves into the atmosphere would not only further accelerate planetary warming, it would likely accelerate impacts on the very city that U.S. oil majors call home: Houston. The city saw more days over 90 degrees last year than ever before, and accelerating heat waves and hurricanes, like 2017’s Hurricane Harvey, are increasingly presenting their own risks to the city’s oil and gas infrastructure.
“The conversation about climate has been, in my opinion, a major casualty of the Trump chaos,” Donziger told the Observer. “The invasion of Venezuela and the extraction of Maduro is an example of really how little the climate issue holds sway anymore on the world stage. It really is up to people to do something about it.”
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