Taking Venezuela’s Oil: How We Got Here

Author’s note: This is the first of a three-part series on President Trump’s de facto seizure of Venezuelan oil reserves.

P erhaps it’s hyperbolic to pronounce the death of the America-led post-World War II international order, based on the rule of law and territorial sovereignty. It’s safe to say, though, that President Trump has scant regard for it.

While the Trump administration is not forever, the prospects for a foreseeable revival are not promising. To the extent that Trump’s political base endures beyond his presidency, it is enthralled by his might-makes-right bullying. That informs a strange new Republican politics that blandishes Vladimir Putin, Xi Jinping, Recep Tayyip Erdoğan, and Kim Jong-un while bashing America’s erstwhile friends. Meanwhile, although the progressive left despises Trump personally, it is over the moon at the strides authoritarian government has made under his administration — in the form of what the Wall Street Journal’s Greg Ip, echoed by Cato’s Michael Chapman, calls “State Capitalism.” Democrats are certain to accelerate these precedents. The conservative resistance to both these camps — rooted in fidelity to the Constitution, limited government, and traditional American promotion of liberty in international affairs — is dormant.

That is my depressing assessment of President Trump’s de facto seizure of rights to 20 percent of Venezuela’s oil reserves — about 65 billion barrels. (At approximately 303 billion barrels of proven reserves, Venezuela is believed to be the world’s most oil rich country. At about 46 billion barrels, the U.S. ranks ninth.)

Supporting a stable international order that promotes the rule of law has made the United States the most prosperous nation in world history. Trump nevertheless has long believed that it makes America a chump. He has for decades maintained, with respect to the Iraq War, that we were idiots not to “take the oil.” To be fair, part of the president’s thinking reflects an equitable sense that the United States should be justly compensated for the gargantuan costs Americans continue to bear for the military intervention and ensuing democratization/counterterrorism project. (These range from about $800 million to nearly $3 trillion, depending on how comprehensively costs are factored.) But mostly, he thinks you should take the oil because you can. That makes all the difference to a small man who sees strength as what he can take thanks to the force he temporarily controls. American strength, however, is drawn from republican values of liberty, the rule of law, and tradition that, over a quarter millennium, enabled such force to be amassed and see the nation through its darkest hours.

Those values, of course, teach that we may not attack and seize the vital assets of a nation that has not even threatened us militarily, much less attacked. Because those values are reflected in our law — the Constitution, congressional statutes, and international treaty commitments — the Trump aggression against Venezuela has been an exercise in (a) circumventing the law and (b) violating the law strategically, to ensure that no one would have standing to sue in court. I include in that aggression the lawless killing of hundreds of people suspected of trafficking illegal drugs in the Caribbean, which Trump officials initially tried to tie to the Venezuelan regime before abandoning the effort because of lack of evidence.

Under such circumstances, only Congress can thwart executive lawlessness. Yet Trump grasps that his dominance over the Republican Party — the subservience of its congressional caucus — shields him from legislative sanctions. Moreover, the Supreme Court’s 2024 ruling, granting him immunity from prosecution for official executive acts, no matter how abusive, protects him from future comeuppance — as does his power to pardon himself and his underlings before leaving office (resort to which is, in my view, inevitable).

So how did we get to this seizure of Venezuelan oil?

Trump first used the pretext of a drug-trafficking indictment against the country’s then-dictator, Nicolás Maduro, to invade Venezuela militarily. Yes, he extracted Maduro (who was brought to New York for prosecution on the indictment), but the real objective was manifest: The administration took effective control of the country by inducing Maduro’s deputy, Delcy Rodríguez, to do its bidding. And its bidding was all about the oil.

That the indictment was just a pretext is elucidated by several facts. For example, in December 2025, Trump granted a shocking pardon to Juan Orlando Hernández, the former Honduran president and a drug kingpin, who was not only convicted of the same offense charged against Maduro (namely, “flooding” the U.S. with cocaine) but was alleged to have collaborated with Maduro in committing that offense. Tellingly, despite extracting Maduro (and his wife), the Trump administration did not similarly apprehend Diosdado Cabello Rondón, Maduro’s co-defendant and ruthless interior minister (even though the Trump State Department ostensibly continues to offer a $25 million reward for information leading to his capture). And Trump has been content to leave in place both Rodríguez and Cabello — pillars of the regime the Trump Justice Department accuses of carrying out the massive narco-terrorism conspiracy — provided that they do as the Trump administration tells them to do.

In January 2026, when Trump ordered the military invasion of Venezuela without congressional authorization, Maduro was Venezuela’s de facto leader, notwithstanding our government’s formal refusal to recognize his legitimacy as such. (The record on that is murky because the Trump administration was actually negotiating with Maduro as head of state on various matters.) While the combat in Caracas lasted less than three hours, American forces killed approximately 100 people (reportedly including about 80 military and intelligence personnel from Venezuela and Cuba). Seven Americans were wounded, and one helicopter sustained damage, but no U.S. personnel were killed, and no U.S. aircraft were lost. Relying principally on Obama-era legerdemain regarding American military operations in Libya, the Trump administration claims that its patent act of war was too modest and brief to be deemed a “war” that would call for Congress’s approval. (Plainly, that would not be the U.S. position if a foreign power invaded the United States and attempted to extract the president.)

Maduro was the successor of his mentor, Hugo Chávez, a totalitarian Marxist closely aligned with communist Cuba (and with the anti-American axis led by China, Russia, and Iran). Back in 2007, Chávez expropriated the assets of American oil companies that were operating in Venezuela — including ConocoPhillips and Exxon — forcing them to cede control to PDVSA, the regime-controlled oil company. (Venezuela had nationalized its oil industry in 1976.) This seizure has been valued at over $20 billion — a considerable sum but just a fraction of the total debt and liabilities, estimated at about $170 billion, that Caracas and its PDVSA arm owe to bondholders and companies holding arbitration awards and U.S. court judgments against them.

The expropriation was an outrage, but it is the chance a multinational corporation takes in choosing to operate in a country governed by such a dictatorship. The U.S. government did not take much action — forcible or otherwise — to aid the oil companies in recovering their damages. Given the antipathy between Washington and Caracas, there were no treaty arrangements for settling commercial claims of this kind. The American companies were largely left to pursue legal remedies through the federal courts and arbitration tribunals (the latter based on the relevant contracts and Venezuela’s membership in the World Bank’s International Center for Settlement of Investor Disputes). They were able to win substantial judgments because, in 1976, Congress had enacted the Foreign Sovereign Immunities Act, which excepts commercial activity from the immunity foreign governments ordinarily have for official acts within their own territory.

As I’ve previously related, in the weeks prior to invading Venezuela and extracting Maduro, President Trump threatened on social media to unleash an American “Armada” of military force against the country unless Maduro’s regime agreed to “return to the United States of America all of the Oil, Land, and other Assets that they previously stole from us.”

This was claptrap. The Chávez/Maduro regime, since inherited by Rodríguez, stole the property of private American companies, not of the United States. Furthermore, the land of Venezuela and its natural resources, including its oil reserves, belong to the nation of Venezuela, which was never an American colony or possession over which our government could legitimately claim property rights. Venezuela’s constitution asserts ownership of its oil reserves in the ground and forbids the regime from transferring them to another country. (Once the oil is extracted, the Venezuelan constitution permits it to be sold by state-designated entities, under PDVSA oversight.)

Given Trump’s allegations, it is worth observing that his unilateral actions, including sanctions imposed during his first administration and actions taken after the January 2026 invasion and extraction of Maduro, have often made it more difficult for the American victims of Venezuelan theft to gain access to Venezuelan assets. Indeed, that now appears to be the point: to shield the Venezuelan regime, which the Trump administration is controlling, from the need to pay judgments that American companies have won in American tribunals based on controlling congressional statutes.

In the next installment, we turn to the law.