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The Bankrupt Premise of Trump’s Venezuela Colony

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The headline and opening paragraphs of a 1,400-word story basically reporting that Trump had sat for the interview Joe Biden had denied the NYT (okay, they didn’t mention the latter bit) focus on Trump’s plan to run Venezuela’s oil industry indefinitely.

Trump Says U.S. Oversight of Venezuela Could Last for Years

President Trump said on Wednesday evening that he expected the United States would be running Venezuela and extracting oil from its huge reserves for years, and insisted that the interim government of the country — all former loyalists to the now-imprisoned Nicolás Maduro — is “giving us everything that we feel is necessary.”

“Only time will tell,” he said, when asked how long the administration will demand direct oversight of the South American nation, with the hovering threat of American military action from an armada just off shore.

“We will rebuild it in a very profitable way,” Mr. Trump said during a nearly two-hour interview. “We’re going to be using oil, and we’re going to be taking oil. We’re getting oil prices down, and we’re going to be giving money to Venezuela, which they desperately need.”

[snip]

During the wide-ranging interview with The New York Times, Mr. Trump did not give a precise time range for how long the United States would remain Venezuela’s political overlord. Would it be three months? Six months? A year? Longer?

“I would say much longer,” the president replied.

That he said that is surely news. And while I assume David Sanger will do a follow-up story that might explain this, NYT did not here.

The headline gives Trump something he badly needs — false assurances to oil companies that have been disabusing Trump of his insane notions that oil will pay for a Venezuela invasion that the US would stick around to make investments worthwhile.

But it doesn’t get into all the problems with Trump’s rapidly moving attempt to turn this into a win: even with that much longer security guarantee, it’s not at all clear this will work.

It started 10 days before the invasion, when Trump told oil companies they had to invest now to get reimbursed for nationalizations in the past.

Administration officials have told oil executives in recent weeks that if they want compensation for their rigs, pipelines and other seized property, then they must be prepared to go back into Venezuela now and invest heavily in reviving its shattered petroleum industry, two people familiar with the administration’s outreach told POLITICO on Saturday. The outlook for Venezuela’s shattered oil infrastructure is one of the major questions following the U.S. military action that captured leader Nicolás Maduro.

But people in the industry said the administration’s message has left them still leery about the difficulty of rebuilding decayed oil fields in a country where it’s not even clear who will lead the country for the foreseeable future.

“They’re saying, ‘you gotta go in if you want to play and get reimbursed,’” said one industry official familiar with the conversations.

The offer has been on the table for the last 10 days, the person said. “But the infrastructure currently there is so dilapidated that no one at these companies can adequately assess what is needed to make it operable.”

Apparently, Trump didn’t heed these warnings, and in the aftermath of the invasion he has made grandiose promises that oil would pay for the invasion.

To be fair, his first announcement — that “the Interim Authorities in Venezuela” had agreed to give the United States (or perhaps Trump personally)  between 30 and 50 MILLION Barrels of High Quality, Sanctioned Oil” which would “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!” may well be an effort to pay for the costs of the invasion.

It’s not at all clear a $2 billion payment would even do that.

DOD has been conducting periodic murderboat strikes every several days, each of which surely costs millions of dollars.

One hellfire missile, for example, typically costs about $150,000, and reaper drones cost around $3,500 per hour to fly. An F-35 costs around $40,000 per hour to fly. The cost per flight hour of an AC-130J gunship is not public but its predecessor, the AC-130U, which was phased out in 2019, cost over $40,000 per hour to fly.

The Gerald Ford has been in the Caribbean since November 16, which works out to be about $424 million (though there were already ships there). One of the $50 million Chinooks used in the attack was badly damaged. Similarly, the Delta Force lead was seriously injured, so taxpayers are paying his recovery and possibly his retirement. There were 150 aircraft used in the attack.

It was a tremendously successful attack.

It wasn’t cheap.

But within days of promising that oil would pay for his new colony, outlets started reporting that taxpayers might have to subsidize that effort.

Donald Trump has suggested US taxpayers could reimburse energy companies for repairing Venezuelan infrastructure for extracting and shipping oil.

Trump acknowledged that “a lot of money” would need to be spent to increase oil production in Venezuela after US forces ousted its leader, Nicolás Maduro, but suggested his government could pay oil companies to do the work.

“A tremendous amount of money will have to be spent and the oil companies will spend it, and then they’ll get reimbursed by us or through revenue,” the president said.

The reasons why are clear: even assuming Venezuela remains stable long enough to develop investments (the promise Trump is floating to the NYT), the cost of refining Venezuelan oil is just too high, particularly given current prices.

The energy-intensive upgrading process also increases the carbon footprint of these heavy grades, which could push up costs further if more governments start taxing emissions or raising existing levies.

Breakeven costs for key grades in the Orinoco belt already average more than $80 a barrel, according to estimates by consultancy Wood Mackenzie. That places Venezuelan oil at the higher end of the global cost scale for new production. By comparison, heavy oil produced in Canada has an average breakeven cost of around $55 a barrel.

Exxon’s breakeven target for its global oil production by 2030 is $30 a barrel, driven by low-cost fields in Guyana and the U.S. Permian shale basin. Chevron has a similar target, while Conoco has a long-term plan to generate free cash flow even if oil prices fall to $35 a barrel. Oil , currently trades at around $60.

While energy boards have increasingly supported greater exploration in recent years, they are insisting that this be done with spending discipline in mind in the face of rising global supplies and uncertainty over the energy transition.

Here’s a table from Bloomberg that shows that Venezuela, even ignoring the potential instability, is just not a competitive investment.

The rest of the article explains what better alternatives the majors are investing in.

Trump seems not to understand this math (or he’s engaged in another con job), because he keeps bragging about the price of oil coming down which … yeah, that’s the point. That’s precisely why imagining you’re going to have willful takers for your offer to invest in expensive-to-refine Venezuelan oil at today’s prices is a pipe dream.

Thus the bribes … er, subsidies, that American taxpayers will end up paying. On top of any deployment, taxpayers will bribe oil companies.

So it doesn’t make sense for the oil companies.

But it also doesn’t make sense for Venezuelans, because the first thing Trump’s backers will demand is that Venezuela pay off years of debt.

Analysts estimate Venezuela now owes $150-$170 billion and JP Morgan calculates that $102 billion of that is in the form of bonds, while bilateral debt to China totals $13-$15 billion.
Venezuela has not reported debt figures for around a decade and state oil company Petroleos de Venezuela (PDVSA) has in the meantime struck complex oil-backed debt deals with China.

Despite Washington’s ousting of Maduro, the main hurdles to a debt restructuring remain in place.

U.S. sanctions — including against Venezuela’s interim President Delcy Rodriguez – mean that even sitting down for creditor talks could breach U.S. Treasury Department curbs.

[snip]

“The U.S. administration has an interest in moving the restructuring forward, because without that restructuring, these oil companies will not be participating and will not be investing anything,” said Ed Al-Hussainy of Columbia Threadneedle Investments, which has Venezuelan bond exposure.

“The possibility of a U.S. government financial line of credit or a guarantee or a backstop of some sort is going to be music to the ears of investors,” the portfolio manager added.

Lee Robinson, founder of Altana Wealth which also holds Venezuelan bonds, said there was enough at stake for the U.S. itself to put a loan in place to kickstart Venezuela’s recovery.
JP Morgan said a recognition of Rodriguez’s new government by the Trump administration would open many questions.

“Should the Fund be bypassed in favour of a faster-track, oil-based bilateral program, we could be going down the road of a faster-track, less orthodox bond restructuring than what we have seen in the years since the pandemic and the advent of the Common Framework,” JP Morgan said.

Sounds like the taxpayers will be on the hook for the debt restructuring, just like the bailout to keep “libertarian” Javier Milei in office.

Moe Tkacik has written a bunch on the extraction involved here, as in this November story on Juan Guaidó’s role in it, during the last time Trump tried to milk Venezuela, making it easier for Paul Singer to acquire CITGO.

On January 23, 2019, when Guaidó proclaimed himself the “interim president” of an incredulous Venezuela, Secretary of State Mike Pompeo announced that the Trump administration would recognize Guaidó as the Bolivarian Republic’s genuine leader, and unveiled a suite of tough new sanctions on PDVSA, pitched as a bid to force Maduro to step down. The whole thing seemed like a joke, a throwback to the days when our foreign-policy establishment insisted a drug-trafficking warlord on an island of six million was the “real” leader of the world’s most populous country—though at least most Chinese knew who Chiang Kai-shek was when he fled to Taiwan in 1949 to preside over what the United Nations insisted on calling the “Republic of China.” Only the Miami Herald noted an unusual provision of the new arrangement, explained by then-Treasury Secretary Steve Mnuchin, who told the newspaper “that if Guaidó succeeds in forming a government, the money” from international sales of Venezuelan oil that he was freezing under the new sanctions regime “would go to him.” On Twitter, Guaidó promised this new arrangement would “prevent the looting from continuing.”

[snip]

Venezuela, PDVSA, and Citgo were legally separate entities. But in mid-February, Guaidó named entirely new slates of board members to PDVSA, its U.S. holding company, and Citgo, a move Rodríguez knew would strengthen Crystallex’s case. That same week, the glass manufacturer Owens-Illinois, which had been awarded a half-billion-dollar arbitration judgment over two Coke bottle factories Chávez had expropriated in 2010, sued Citgo on the basis that it was an “alter ego” of the state. Owens-Illinois had expert witness assistance from none other than José Ignacio Hernández, whom Guaidó had just named the attorney general of the shadow government.

That is, Trump proposes to fix the problem he, in significant part, caused in his first term.

Plus, until you fix Venezuela’s corruption problem — which Trump has pointedly declined to do in retaining Delcy Rodríguez, partly because he’s relying on Maduro’s suppression regime to offer stability to oil companies, partly because he affirmatively loves corruption — then the Venezuelan people aren’t going to see anything, even while Trump is attempting to oust China’s slightly more favorable float.

And all this is happening on a time frame — big investments and risks on the front end, very long timetable for returns to anyone — that I imagine China is taking some solace about being surprised, if it was surprised, by looking at how Trump’s obsession with becoming a petro-autocrat leaves it untouched to dominate renewables for the foreseeable future, renewables that will continue to put pressure on oil prices in a way that Trump seems not to understand.

And all that assumes Trump, or Dalcy Rodríguez, can ensure stability, something for which there’s no evidence. All that assumes that no one decides to make a target of the resources Trump has put in the middle of an increasingly volatile Caribbean.

Trump is literally making up Colonialism 2.0 on the fly. And the serially bankrupt businessman appears to be doing funny math at every turn.

So yeah, Trump is making expansive claims to the NYT. But they are part of an elaborate con job to prevent this Venezuela adventure from backfiring in a spectacular way.

Stephen Miller Has Similar Plans for Colombia and Columbia

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Laura Jedeed wonders whether Trump is testing out a new kind of colonialism, where you basically issued orders to the corrupt illegitimate authorities, rather than installing the opposition.

Trump and Rubio’s talking points combine into a message intended not for the people of America, but for the heads of state in Cuba, Columbia, [sic] and worldwide. The message itself is simple, elegant, and ugly: do exactly what we say or America will destroy you—not your country, or your economy, or your people, but you, personally. This strategy doesn’t just let America “run” Venezuela. It allows this administration to “run” any country unable to attack us on our home turf: extract their resources, dictate their domestic policy, force their leaders to resign. All by credibly threatening extreme personal violence against any head of state who pushes back.

Credit where credit is due: it’s an entirely new approach to colonialism. Here’s how it’s worked since Britain perfected the art: you invade the country, then place the opposition party in power. That party requires your support to maintain control (if they had enough force to do it themselves they’d already be in charge). In exchange for military backup, their leader will do anything you ask.

Trump, on the other hand, has endorsed Maduro’s Vice President, Delcy Rodríguez, allegedly because the opposition party “doesn’t have the support within, or the respect within the country.” This assertion is aggressive nonsense. Opposition party weakness is a feature, not a bug, for the reasons stated above. It’s also patently untrue in this case. Election monitors from several countries agree that candidate Edmundo González Urrutia beat Maduro in a landslide two years ago by as much as 51 percent. Trump and his allies know this—they’ve used Maduro’s election theft to justify invasion. It’s kind of perfect: the party doesn’t have the power to gain power by themselves, but they’re popular enough to minimize the danger of revolt. It’s the dream situation—so why isn’t the Trump administration going for it?

Most people seem to think Trump’s endorsement of the unpopular and hostile Rodríguez stems from bitterness towards María Corina Machado, the opposition party leader who received the Nobel Peace Prize that Trump wanted so badly last year. Machado seems to think so too; she’s offered to give the prize to Trump and spent ten minutes abasing herself before the Peace President on Hannity yesterday. It won’t help. Trump is petty to the core, it’s true, but Stephen Miller and the other ghouls actually running this country would never set the entire colonial playbook on fire just to appease some old queen’s ego.

The real reason, I suspect, is this: leaving Rodríguez in charge is the only move that does not require a full-scale invasion.

Unlike Machado, Rodríguez possesses a military and police force capable of holding Venezuela together. Under the old model, that force would have threatened our hegemony, but under Colonialism 2.0, she has a strong incentive to do exactly as she’s told regardless; she is, after all, one surgical strike away from losing her freedom or possibly her life. As long as she doesn’t call Trump’s bluff or get coup’d herself, it’s foolproof.

[snip]

And the administration was right: Rodríguez is already rolling over. “We consider it a priority to move towards a balanced and respectful relationship between the US and Venezuela,” she wrote on Telegram late Sunday. “We extend an invitation to the US government to work together on an agenda for cooperation that is aimed towards shared development.” So far, so good.

That’s certainly what Trump is trying to do.

But it’s wildly premature to assess whether it’ll work.

Before I explain how it may backfire, let me observe that this plan is precisely the same plan Trump (Stephen Miller, really) is attempting with the US.

What Trump plans for Colombia is little different than what he succeeded in doing with Columbia University: Make demands on the elected leader, extract tribute, change the rules to benefit the authoritarian state. Whether it will work long term has yet to be seen, but the lesson of New College in Florida shows where things may head in the medium term: with dramatically increased costs and noticeably decreased utility. Once DeSantis is out of power, the effort is likely to be abandoned, turning New College into a bigger shell than it is already is. Columbia might take longer to collapse, unless Stephen Miller doubles down on his demands.

Now consider what makes Venezuela (or Colombia) different from Columbia, starting with the guns, guns which might come from at least three different places.

First, there are Russia, China, and some other Venezuelan patron states that are under assault as well. Trump has ordered Venezuela to expel them, stop doing business with them, and sell oil only to the US.

The Trump administration has told Venezuela’s interim president Delcy Rodriguez that the regime must meet the White House’s demands before being allowed to pump more oil, according to three people familiar with the administration’s plan.

First, the country must kick out China, Russia, Iran, and Cuba and sever economic ties, the sources said. Second, Venezuela must agree to partner exclusively with the U.S. on oil production and favor America when selling heavy crude oil, they added.

According to one person, Secretary of State Marco Rubio told lawmakers in a private briefing on Monday that he believes the U.S. can force Venezuela’s hand because its existing oil tankers are full. Rubio also told lawmakers that the U.S. estimates that Caracas has only a couple of weeks before it will become financially insolvent without the sale of its oil reserves.

As we speak, the Trump Administration is carrying out a replay of the OJ White Bronco chase, but with an empty oil tanker headed for Russia.

Russia has sent a submarine and other naval assets to escort an empty, rusting oil tanker that has become a new flashpoint in U.S.-Russia relations, according to a U.S. official.

The tanker, formerly known as the Bella 1, has been trying to evade the U.S. blockade of sanctioned oil tankers near Venezuela for more than two weeks. The vessel failed to dock in Venezuela and load with oil. Although the ship is empty, the U.S. Coast Guard has pursued it into the Atlantic in a bid to crack down on a fleet of tankers that ferry illicit oil around the world, including black-market oil sold by Russia.

The vessel’s crew repelled an effort by the U.S. to board the vessel in December and steamed into the Atlantic. As the Coast Guard followed it, the crew sloppily painted a Russian flag on its side, changed its name to the Marinera and switched its registration to Russia.

Russia has been concerned by U.S. seizures of tankers that ferry its illicit oil around the world and power its economy, and it has made the unusual move of allowing the tanker to register in Russia without an inspection or other formalities, experts say.

Update: The US has now seized the tanker.

Will this lead to some kind of direct conflict? I have no fucking clue and neither do you, because both Trump and Putin are fucking nuts. If Trump were rational, he’d retaliate not with direct confrontation in the North Sea, but by arming Ukraine and giving them the green light to up its attacks on Russia, but he’s not rational. Russia’s economy is actually close to collapse, and it wouldn’t take much to get it there. Russia, of course, has other means it might use to retaliate against Trump.

We shall see.

China is another matter though. China not only is rational, but China kicked the shit out of Trump in his last attempt to demand obeisance, the tariffs. Trump thought he could achieve with tariffs what he is trying to achieve with Venezuela: obeisance and personal tribute. Not only have all the tariffs harmed the US, spiking small business bankruptcies and inflation (and in the process making Trump’s political support far weaker), but China used its near-monopoly on rare earths and ability to replace US soybeans to bring Trump to his knees instead.

In fact, the Venezuelan coup might be partly a response to China’s success at wielding the rare earth weapon. While there’s much I disagree with in it, this post argues the Venezuela invasion was not about oil, but about the rare earth China currently extracts.

Investigative reporting documented Chinese buyers operating directly at mining sites in Bolívar state. The Venezuelan government established official collection centers in Los Pijiguaos and Morichalito in 2023 specifically for cassiterite, coltan, nickel, rhodium, and titanium. The Maduro regime designated these as strategic resources for commercialization, meaning state control over extraction and export, with Chinese buyers integrated into official operations from the start.

The supply chain from Venezuelan mines to Chinese refineries operates through both formal and informal channels, with Chinese buyers exercising operational control at the extraction source. Minerals extracted in the Orinoco Arc move by river and air transport to Colombian border towns, then to Bogotá for smelting into refined bars. These materials are relabeled under incorrect tariff codes, transforming raw ore into processed ferro-tantalum or other classifications that obscure origin. Final export occurs through Colombian ports at Santa Marta and Buenaventura, destined for Chinese processing facilities.

Once Venezuelan minerals blend with Colombian or Brazilian ore in these intermediary steps, tracing origin becomes effectively impossible. This laundering mechanism allows Venezuelan minerals to enter legitimate global supply chains, including those feeding US defense contractors. The result is Pentagon weapons systems potentially incorporating materials extracted under Chinese buyer supervision in Venezuelan territory, then processed in Chinese refineries controlled by Beijing.

Chinese buyers do not operate at arm’s length through market transactions. They coordinate directly at the mining sites with both Colombian guerrilla groups (ELN, FARC dissidents) who control physical security and Venezuelan state security (SEBIN) who facilitate transport using official government vehicles. One miner described seeing Chinese operatives and ELN commanders “eating together, buying material together, and getting off the helicopter together.” This is not commercial activity. This is integrated operational control where Chinese buyers work directly with armed groups and state officials to extract strategic minerals.

Trump doesn’t need — indeed, the oil companies probably don’t want — Venezuela’s oil, at least not in the short term.

He does need rare earth deposits (which is also the stated purpose of usurping Greenlands).

It took us some months to understand how China responded to Trump’s threat of tariffs. It took less time to recognize China’s advance preparation for them (based on Trump’s trade war from the first term).

A lot of the coverage of the coup views it as a profound humiliation for China, not least because China’s Latin American envoy met with Nicolás Maduro the day before the coup. That didn’t stop China (and Russia and Iran) from attending Rodríguez’ signing in, so there’s a distinct possibility they’re in at least as close coordination with Rodríguez right now as Marco Rubio.

But the most belligerent thing — the thing people expect — is that China will take Taiwan, as it was practicing to do even as Trump had a fifth of deployed assets in the Caribbean preparing to invade.

With all the attention on Venezuela, there has been too little attention on vacuums created with this extended deployment off the coast of Venezuela (the most immediate of which is probably in the Middle East). But it is clear that Trump keeps launching little wars with resources most of Congress believes should be used to counter China’s expansionary plans.

But as China showed with the tariffs, they likely have ways to respond that are less direct and at least as devastating.

But China and Russia aren’t the only ones who have guns here.

So does, just as one example, Interior Minister Diosdado Cabello, who has been indicted in SDNY alongside Maduro since 2020. Reuters describes that the US already threatened Cabello.

In the meantime, they have communicated to Cabello via intermediaries that if he is defiant, he could face a similar fate to Maduro, the authoritarian leader captured in a U.S. raid on Saturday and whisked away to New York to face prosecution on “narco-terrorism” charges, or could see his life in danger, the source said.

But taking out Cabello could be risky, possibly motivating pro-government motorcycle groups, known as colectivos, to take to the streets, unleashing the chaos Washington wants to avoid. Their reaction may depend on whether they feel protected by other officials, however.

In one of her first decisions as acting president, Rodríguez appointed General Gustavo González López as new head of the Presidential Honor Guard and the Directorate General of Military Counterintelligence (DGCIM), state TV said late on Tuesday.

González López, who has been sanctioned by the U.S. and EU along with at least half a dozen other high-ranking officials for rights violations and corruption, served as Venezuela’s intelligence director until mid-2024, when he was replaced by Maduro in a reshuffle of his cabinet and security team.

Later that year, he began working with Rodríguez as head of strategic affairs and control at state oil company PDVSA.

González López was considered close to Cabello, but it was not immediately clear whether his appointment was a gesture of support from Rodríguez to the man considered the strongman of the ruling party, or, on the contrary, a sign of a rift.

The officer replaces General Javier Marcano, whose performance came under scrutiny after Maduro’s capture, according to analysts.

One thing I’ve seen no coverage of is why the US thinks Rodríguez will be secure within Venezuela now that Trump killed the 40 Cubans who were protecting Maduro. And the militias via which Cabello exercises some of his repression could carry out a deniable kind of violence.

But Cabello isn’t even the only one with guns in question. The purported purpose of this operation is about stopping drug trafficking. But unless Trump is doing what every other caudillo does — manage the trade while extracting tribute — there will, eventually, be a counter response from the cartels, which don’t take kindly to losing their markets and have the ability to exercise violence both on site — in Venezuela — but also closer to home, including in the United States. Stephen Miller has so much of US law enforcement snatching workers at Home Depot that certain kinds of crime are likely far easier to pull off. Update: About which the NYT has another story today.

Finally, there are the Venezuelan people. Maduro only remained in power with a great deal of repression, and Trump is tinkering with that system of repression. Meanwhile, Trump’s plans to expel much of the Chinese may exacerbate already dire economic conditions for Venezuelans, because Trump won’t subsidize soft power in the way China has been willing to (to say nothing of the expulsion of Cubans who were providing medical care). Where Stephen Miller’s authoritarianism has failed most dramatically in the US is the way the counter reaction to his goons has revitalized civil society in cities that stand up to the goons. And there’s already a practiced opposition in Venezuela that, as in the US, dramatically outnumbers the goons in charge.

It’s only day four. We have no fucking idea how this will turn out. While Delta Force and the CIA performed spectacularly, there’s really just a handful of people in charge, and most — like Stephen Miller, who thinks of Venezuela as an island surrounded by a US armada and therefore is likely forgetting about a porous border with Colombia — are utterly ignorant about Venezuela and childish about power.

Columbia University was easy to subjugate, because no one had guns. But even there it only happened by damaging the host. There are a lot of people with guns with an interest in Venezuela.

It’s just as likely, in my opinion, that this precipitates World War III as that it succeeds in Venezuela much less produces the treasure Trump is demanding.

Update: CEO of the Human Rights Foundation, Venezuelan Thor Halvorssen, predicts Delcy Rodríguez’ quick demise.

Reports indicate the Trump administration has struck a deal with Delcy Rodríguez, Mr. Maduro’s iron-fisted vice president, positioning her as a transitional leader. She has, it seems, convinced U.S. officials that she can dismantle the Maduro dictatorship, which would have to include demobilizing the armed militias, disbanding the dreaded secret police and ending the regime’s drug empire. But this is a fantasy. Ms. Rodríguez will fail spectacularly, leading to the final unraveling.

Venezuela isn’t like Mexico, where a state coexists uneasily with cartels. Here, the cartel is the state. Factions—enriched generals, intelligence chiefs and narco-traffickers—won’t surrender power in a Washington-brokered deal. Ms. Rodríguez herself faces insurmountable obstacles, beginning with her utter lack of legitimacy. Never elected vice president, she has less authority than Mr. Maduro, the usurper who appointed her.

I think he wildly overestimates the extent that Trump would even permit any lapse in repression.

Update: Meanwhile on Xitter, I take this as confession that Stephen Miller knows fuckall about the oil market, especially the discount at which Venezuelan oil must be sold and the price at which it is worth drilling.

Paul Krugman’s column today is on how Trump’s oil math doesn’t add up.

[W]hatever it is we’re doing in Venezuela isn’t really a war for oil. It is, instead, a war for oil fantasies. The vast wealth Trump imagines is waiting there to be taken doesn’t exist.

Update: WSJ goes into more depth about the challenges Cabello may pose to Trump’s plans.

Fond of swinging a spiked club while spouting conspiracy theories on his hourslong weekly show on state television called “Bringing Down the Hammer,” now on its 556th episode, Cabello is hard to predict.

Cabello, a 62-year-old whose official title is minister of interior, justice and peace, has so far signaled unity, taking part in Rodriguez’s swearing-in ceremony on Monday, where various factions of Venezuela’s ruling socialist party were present.

But that night, Cabello was toting a rifle and riling up black-uniformed security forces before they patrolled Caracas to prevent citizens from protesting.

“Doubting is treason!” he said, before telling the armed group, “Now, off to battle in the streets for victory.”

Under a state of emergency that the government declared after Maduro’s capture, security forces were ordered to hunt down U.S. sympathizers, according to the Official Gazette, where the Venezuelan government publishes new laws and decrees. Residents in the capital reported new roadblocks around the city where armed, masked men checked the phones of ordinary Venezuelans for antigovernment messages.

Update: This offers a good explanation of all the people with guns who would make things difficult even if Delcy Rodríguez did want to cooperate with the US.

Update, January 9: This analysis lays out the difficulties of Delcy Rodriguez’ position better than I did.

For her part, Rodríguez confronts an unprecedented challenge for a Venezuelan leader: She must satisfy Washington’s demands while maintaining sufficient Chavista coalition support to prevent an internal fracture or a military coup. The Trump administration demands sufficient cooperation to enable US oil company operations, likely including transparent property contracts and regulatory stability—precisely the institutional environment that Chavismo systematically dismantled. Rodríguez making such an agreement with Trump would alienate the regime’s hardliners, who would view her accommodation as a betrayal. Thus, Rodríguez may be unable to guarantee the stability required for the business operations Trump wants to run in Venezuela.

Her public contradictions reflect this impossible position. In her first televised addresses as interim president, she demanded Maduro’s immediate release to demonstrate loyalty to domestic audiences. Less than twenty-four hours later, however, she declared it a priority to move toward a “balanced and respectful” economic cooperation between the United States and Venezuela.

This double game cannot persist indefinitely. Rodríguez must choose between accommodating Trump’s demands or preserving Chavista unity. Trump’s threat that if Rodríguez “doesn’t do what’s right, she is going to pay a very big price, probably bigger than Maduro” makes clear that there will be consequences of noncompliance. Purging the hardliners may be Rodríguez’s best option.

Perhaps Rodríguez’s most complex challenge is managing Venezuela’s deep entanglements with China, Russia, Iran, and Cuba while simultaneously partnering with the Trump administration. This is especially the case after the Trump administration demanded that Venezuela immediately cut ties and cease intelligence cooperation with Russia, China, Iran, and Cuba. These relationships represent more than diplomatic alignments—they constitute binding financial obligations, operational dependencies, and strategic commitments that cannot simply be abandoned without triggering massive economic and security consequences.

China presents the most significant financial exposure. Venezuela owes Beijing around twenty billion dollars in loans. These debts are secured through oil-for-loan arrangements that require repayment through crude deliveries, with China currently absorbing more than half of Venezuela’s oil exports (approximately 746,000 barrels per day in November 2025).

Beyond petroleum, Chinese state enterprises control critical Venezuelan infrastructure.

Stephen Miller and Plans for Post-Decapitation

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Stephen Miller’s breeding partner created a worldwide scandal by posting a picture of Greenland as an American flag.

The map from a far right podcaster, however well-connected, was actually less important than that the US President, the same day, told Michael Scherer, “we do need Greenland” because it was “surrounded by Russian and Chinese ships,” a sentiment Trump repeated on Air Force One yesterday.

During our call, Trump, who had just arrived at his golf club in West Palm Beach, was in evident good spirits, and reaffirmed to me that Venezuela may not be the last country subject to American intervention. “We do need Greenland, absolutely,” he said, describing the island—a part of Denmark, a NATO ally—as “surrounded by Russian and Chinese ships.”

Of course, since both Katie Miller and Donald Trump largely parrot what they’ve recently heard, both comments likely reflected the views of Stephen Miller.

Meanwhile, this passage of a story describing how Trump really hasn’t (yet) committed regime change, but instead decapitated the Venezuelan state only to leave Maduro’s cronies in place (for now), attracted a flood of confirmation bias.

Two people close to the White House said the president’s lack of interest in boosting Machado, despite her recent efforts to flatter Trump, stemmed from her decision to accept the Nobel Peace Prize, an award the president has openly coveted.

Although Machado ultimately said she was dedicating the award to Trump, her acceptance of the prize was an “ultimate sin,” said one of the people.

“If she had turned it down and said, ‘I can’t accept it because it’s Donald Trump’s,’ she’d be the president of Venezuela today,” this person said.

I have no doubt Trump was pissed María Corina Machado got the Nobel Prize and he did not. But a Miami Herald story published just six days after Machado’s recognition described that Delcy Rodriguez had been pitching a Madurismo without Maduro via back channels for months.

A group of senior Venezuelan government officials, led by Vice President Delcy Rodríguez and her brother Jorge, who is president of the National Assembly, have quietly promoted a series of initiatives in recent months aimed at presenting themselves to Washington as a “more acceptable” alternative to Nicolás Maduro’s regime, according to people with direct knowledge of the talks.

The proposals, funneled through intermediaries in Qatar, sought to persuade sectors of the U.S. government that a “Madurismo without Maduro” could enable a peaceful transition in Venezuela—preserving political stability without dismantling the ruling apparatus.

According to the sources, Qatari mediators presented to the U.S. two formal proposals this year, one in April and another in September. Both outlined potential governing mechanisms without Maduro in power. In those scenarios, Delcy Rodríguez would serve as the institutional continuity figure, while retired Gen. Miguel Rodríguez Torres, who is currently in exile and is not related to the Rodriguez siblings, would head a transitional government.

The central argument, the sources said, was that the Rodríguez siblings represent a “more palatable” version of so-called chavismo — the socialist ideology named for deceased leader Hugo Chávez — for Washington, since neither has been indicted on narcotrafficking charges by U.S. courts. However, former regime officials— whose accounts have been used by U.S. prosecutors in cases linked to the so-called Cartel of the Suns—have implicated both siblings in logistical support and money laundering operations.

Delcy Rodriguez is also the person who, according to the indictment charging Marco Rubio’s old roomie, former Congressman David Rivera, with acting as an unregistered agent of Venezuela (for which he is due to stand trial next month) who ordered CITGO to serve as a front for the contract. As part of the contract, Rivera lobbied Rubio in 2017 on a Maduro succession plan.

Delcy Rodriguez has been in the thick of such efforts from the moment Trump first became President.

So while the attribution of Trump’s sidelining of Venezuela’s democratic opposition — by a single person “close to the White House” — to the President’s narcissism surely has some truth, I’m more interested in that same story’s report that Stephen Miller may actually take on some of the duties of Viceroy that Trump initially assigned to the Miami-raised Spanish speaking Marco Rubio, not least because that may explain why Trump chose decapitation — retention of the oppressive Maduro regime — over regime change, replacement with a democratic one.

Having dismantled much of the U.S. foreign policy infrastructure since he came to power, Trump depends on a small number of trusted personnel and business associates to handle core issues such as his peace plan in Gaza, negotiations between Ukraine and Russia, and now Venezuela.

The National Security Council staff has been gutted and the administration has yet to nominate an assistant secretary of state to handle the Western Hemisphere.

The White House is weighing giving Stephen Miller, Trump’s deputy White House chief of staff and homeland security adviser, a more elevated role in overseeing post-Maduro operations in Venezuela, according to one person with knowledge of the conversations, who, like others, spoke on the condition of anonymity to discuss sensitive dealings.

Miller has been the architect of the administration’s anti-immigration and border policy, and took a central role in the effort to remove Maduro. He was among the handful of top administration officials flanking the president during the news conference Saturday at Trump’s Mar-a-Lago Club.

War on the Rocks argues that too many people are trying to read Trump’s decision to invade Venezuela as a statement of his ideology, rather than the result of the chaotic fight for influence within his White House.

Many observers of this administration underestimate the power struggle inside the administration and how it scrambles the output. Venezuela has been an interesting case of this. My hypothesis here is that Venezuela has been an outlet of sorts for the hawks, especially Secretary of State Marco Rubio but also others. There has been no sustained appetite for confrontation with Russia or China, and only limited room to maneuver on those fronts without significant escalation risks. Iran and Venezuela, by contrast, offered arenas for hawkish foreign policy.

[snip]

When it comes to predicting the president’s next move, too many politicians and analysts assume coherence where there is division, chaos when there is improvisation, and restraint where there is only selectivity. Trump’s foreign policy behavior emerges not from doctrine but from friction. Venezuela offered a target that felt weak, morally disreputable, geographically proximate, and manageable.

Under Trump, foreign policy outcomes are less the product of grand strategy than of episodic alignment. Observers should stop asking whether a given action is consistent with Trump’s supposed beliefs and start asking whether it is legible to him as fast, dominant, and containable. They should pay closer attention to intra-administration dynamics and to how ideas persist even when not immediately acted upon. Otherwise, the failure to predict Venezuela will not be an outlier.

Given the WaPo report (which came after Viceroy Rubio bombed on the Sunday shows) that Miller will be playing in a key role in America’s new colony, I want to situate the Venezuelan coup in Miller’s own history.

It is my belief — this is a hunch based entirely on observation, not any insider reporting — that Miller made himself indispensable when he helped Trump pull himself together after the Butler assassination attempt. Trump was completely dysfunctional after the near-death experience (I don’t blame him — everyone would be floored by that trauma). I would argue that Trump has never actually reclaimed his poise since then — throughout the campaign, he was already surpassing all decency on his political attacks, and he frequently got lost on the campaign trail, including his sundowning episode on the campaign trail. Everything people point to now as proof that he is unfit to be President was evident on the campaign trail. But Trump buried his collapse under ever grandiose fascist theater, much of it orchestrated by Miller, leading up to Trump’s fascist rally at Madison Square Garden, and shortly after, to election victory.

Whether or not that’s the case, it is clear that in the same period, Miller started laying the groundwork to use Venezuela as a propaganda foil for his assault on democracy, which I documented here.

  • 2023: Miller decides invoking the Alien Enemies Act will be a nifty way to deport people without due process.
  • September 2024: right wing propagandists stoke claim that Aurora, CO has been invaded by Tren de Aragua.
  • October 11, 2024: Miller stages a hate fest in Aurora.
  • October 18, 2024: After Tim Walz and others debunk Miller’s lies, he accuses them of defending gang members.
  • February 9, 2025: One of Miller’s earliest high profile raids targets Aurora but nets just a single TdA member.
  • February 26, 2025: The IC debunks Miller’s false claims about TdA.
  • March 14, 2025: Trump nevertheless relies on those lies while invoking the Alien Enemies Act.
  • March 16, 2025: DHS unloads planes of mostly innocent Venezuelan men in defiance of order from Judge James Boasberg.
  • March 21, 2025: Trump claims he’s not the one who signed the AEA invocation.
  • April 2025: WaPo reports that the NIE also debunked Miller’s false claims about TdA.
  • April 10, 2025: SCOTUS rules Trump has to make some effort to get Kilmar Abrego back.
  • April 14, 2025: Performance art with Nayib Bukele in Oval Office.
  • April 19, 2025: SCOTUS halts an AEA deportation order in process.

But then, on July 18, 2025, Trump swapped Venezuelans from CECOT for 10 Americans in Venezuela, seemingly dealing Stephen Miller a major defeat in his plan to rely on AEA.

 

 

I questioned why that happened here. And on the same day, NYT provided what is in retrospect even more critical background, a batshit insane story I glossed here. As the entire CECOT drama was proceeding, Trump was dicking around the Miami Hispanic community, which was clamoring to pressure Maduro, first halting then renewing Chevron’s Venezuela license.

  • January 31: Maduro makes a deal with Grenell.
  • February: Cuban-American Members of Congress (CAMC) pressure Trump to pull the Chevron license, which he does in late February (possibly between the time Rubio signs the deal with Bukele and the day 200 mostly-innocent men are loaded on planes?).
  • Chevron CEO Mike Wirth notes that if Chevron can’t export Venezuela’s oil, China will do so.
  • CAMC learn that Trump might reverse his decision, so threaten to vote against the Big Ugly Bill.
  • Stephen Miller pitches Trump on murderboats.
  • Trump lets Chevron license expire on May 27.
  • CAMC vote to pass Big Ugly.
  • Around the same time Trump considers a pardon for convicted drug kingpin Hernández, Marco Rubio sells Trump on a claim that Maduro is a drug kingpin.
  • July: Based in part on Wirth’s China argument, Trump reverses course, again, on Chevron license, Maduro accepts the CECOT prisoners and releases 10 Americans, including a triple murderer.

Trump’s flip-flopping over the Chevron license would lead up to Trump’s command, ten days before the actual invasion, that oil companies prepare to invest in Venezuela if they want compensation for equipment Maduro seized.

But we know that, after Miller first pitched Trump on drone strikes in Mexico, and then he and Rubio (Miller to support his fascist project including hopes to return to using the AEA declaration, Rubio to cater to Miami’s Cuban-American desires) pitched Trump to instead attack Venezuelan-related drug trafficking. On July 25 — a week after returning the hundreds of mostly innocent men to Venezuela — Trump signed an order to begin the murderboat campaign, with murderboat strikes beginning in September. That same day, Marco Rubio pretended this was all about the election Maduro stole last year. Another week later, Pam Bondi upped the reward to help capture Maduro — $50 million we don’t yet know whether has been claimed.

This would have been the period when CIA and Delta Force started practicing the snatch of Maduro.

According to a new WSJ story, it wasn’t yet a foregone conclusion that Trump would approve the attack. Maduro remained dancing in videos that reported inflamed Trump, and dancing in negotiations to leave peacefully (even as Delcy Rodriguez was working back channels to assume power in his wake).

  • October 7: CNN reveals Trump has a covert finding authorizing strikes on cartels.
  • October 10: Machado wins Nobel Prize.
  • October 15: Trump confirms he has signed a finding authorizing strikes on cartels.
  • October 16: Alvin Holsey announces his retirement.
  • November 16: Ford carrier group arrives in the Caribbean.
  • December 1: Trump pardons Juan Orlando Hernández, whose crimes include shipping drugs originating in and protected by Venezuela.
  • December 10: Trump starts seizing oil tankers; Machado arrives in Oslo just after the prize is awarded.
  • December 23: Maduro rejects offer to exile in Turkey.
  • Roughly December 25: Trump orders oil companies to prepare to invest in Venezuela.
  • December 29: CIA strikes a loading facility in Venezuela.
  • Unknown date: DOJ supersedes existing indictment against Maduro, shifting emphasis (without much substantiation) from Cartel de los Soles to Tren de Aragua, and including Maduro’s wife and son.
  • January 3: Trump snatches Maduro.

And immediately after Trump’s Administration imagined that they had proven their concept of decapitation without regime change, Trump started listing other places he would attack, including Cuba — high on Rubio’s list — but also Mexico (which Miller had had to defer earlier), Colombia, and Greenland.

If Marco Rubio had unilaterally won these battles, the chances would have been greater for genuine regime change; and his failure to deliver may soon sour his constituency on the snatch.

That this was, at least for the moment, decapitation, suggests Miller presided in the end.

After all, Trump also immediately likened the snatch operation to Miller’s domestic efforts to subjugate both civil society, including universities, law firms, and hospitals treating trans children, but also entire blue states, with paramilitary invasions launched in the name of deportation.

Miller’s goals are to demand subservience from everyone on threat of invasion, if not death, the stated means of keeping Delcy Rodriguez on track.

In the end, Stephen Miller is perfectly happy to get in bed with proud socialists, it turns out, so long as he can appropriate their authoritarian tools to his own ends.