In the past, the American ruling class invented spurious claims about weapons of mass destruction or human rights violations to dupe workers into supporting its imperialist adventures. By contrast, Trump laid out one of the capitalists’ interests in Venezuela plainly: oil.
An estimated 303 billion barrels of crude lie beneath the surface of the South American country, and the US ruling class cannot tolerate the Venezuelan people controlling it. In his January 3 press conference, Trump insisted that the Venezuelans had stolen their oil industry from the US: “Venezuela unilaterally seized and sold American oil, American assets, and American platforms costing us billions and billions of dollars.”
Stolen oil?
What exactly does he mean? Trump is certainly not referring to President Carlos Andrés Pérez’s establishment of the state-owned oil company, Petróleos de Venezuela, S.A. (PDVSA), in 1976. Pérez didn’t expropriate the oil industry. Instead, he bought out Western oil companies to the tune of $1 billion—more than $5.8 billion in today’s money.
Before the Bolivarian Revolution, PDVSA was run as a capitalist enterprise, focused on increasing profits rather than serving the needs of the Venezuelan people. Western multinationals were junior partners in the scheme. Their old Venezuelan managers remained in charge. These corrupt bureaucrats sold crude at heavily discounted prices to their former bosses.
Perhaps Trump is referring to Chávez’s expropriation of some of the multinationals’ assets in 2007. Yet, to suggest that Venezuela “stole” American property is a lie. Venezuela’s natural resources belong to the Venezuelan people by right, and the country’s oil infrastructure was built up, not by American billionaires, but by the toil and sweat of Venezuela’s working class.
Moreover, instead of simply “seizing” these assets outright, Chávez proposed that PDVSA negotiate 60% control of their stakes in Orinoco Belt, which accounted for 18% of Venezuela’s oil production. Among major US companies, only Chevron agreed. ExxonMobil and ConocoPhillips refused, and then took Venezuela to international courts of arbitration for a combined $13 billion.
Trump’s mounting threats to Iran are another avenue by which US imperialism is waging a petro-proxy war against China. / Image: In Defence of Marxism
Petro-proxy war
Trump’s warmongering may have more to do with imperialist grand strategy than immediate profits. The US imperialists are seeking to deny their rivals, particularly China, from markets and resources.
One third of China’s oil imports come from sanctioned sources, including not only Venezuela, but also Iran and Russia. According to Argus Media, Chinese refiners saved $9 per barrel on Venezuelan oil compared to heavy crude from Canadian sources.
Trump’s mounting threats to Iran are another avenue by which US imperialism is waging a petro-proxy war against China.
Who will foot the bill?
Trump insists that American companies will reinvest in Venezuela’s oil industry. The dust had hardly settled in Caracas before one ex-Chevron executive started soliciting $2 billion for the purpose. But this is only a drop in the bucket compared to the $100 billion Trump wants.
Convincing the capitalists to front the money won’t be easy. ExxonMobil’s CEO, Darren Woods, called Venezuela “uninvestable.” In response, Trump threatened to block them from any future deals.
The Trump administration aims to drive US oil prices down to $50 per barrel. This would lower energy costs for US workers suffering from a deepening affordability crisis. But if crude prices fall on the world market, the oil giants will have even less incentive to invest.
Venezuela’s reserves consist mainly of heavy and extra-heavy crude, which are relatively expensive to produce and refine. Some industry analysts estimate that Venezuelan oil is only profitable when the price tops $80 a barrel.
To overcome this, the White House has suggested the possibility of reimbursing the oil giants through corporate handouts. But this would merely mean shifting the burden from the capitalists to the working class in the form of greater government debt—debt which will have to be repaid through taxes and cuts to government services.
Imperialism to blame
After years of imperialist attacks, Venezuelan oil production fell from a high of 3.5 million barrels per day under Chávez to less than a million today. The first major assault came with the 2002–2003 oil strike. It was, in effect, a bosses’ lockout aimed at ousting Chávez. Rank-and-file PDVSA workers brought production back to 50% of capacity by mid-January 2003, defeating the lockout. Despite the workers’ heroic efforts, however, two further decades of US sanctions and bullying have whittled away at Venezuela’s markets and its ability to reinvest.
Now that US imperialism finally has the upper hand in Venezuela, its only concern is to steal even more wealth from the beleaguered country, at the expense of its people. Meanwhile, American workers will be forced to foot the bill for imperialism abroad through austerity at home. Trump and his cronies may think it’s a win-win situation. But eventually, imperialism’s chickens will come home to roost in the form of the American Socialist Revolution.