STATE CAPTURE · VENEZUELA

Resources, power, and the return of old temptations

For more than a decade, Venezuela has been presented to the world as a morality tale: socialism gone wrong, oil squandered, institutions hollowed out, a nation brought to ruin by misrule. That story contains truths, but it is incomplete. What has unfolded reveals not merely a Venezuelan crisis, but a test of how power, law and resources are now exercised in a fractured global order.

Vayu Putra · 3 February 2026

In January 2026, following months of mounting pressure, international isolation and internal fracture, Nicolás Maduro's régime finally collapsed. What followed was not a spontaneous democratic transition but a coordinated external intervention involving the United States, Brazil and Colombia, justified on humanitarian grounds but driven substantially by resource considerations. The removal of Maduro by external force marks a decisive break—not only for Venezuela, but for the international system that has governed state behaviour since the middle of the twentieth century.

The question is no longer whether Venezuela failed. It is whether the world has quietly abandoned the constraints that once limited how such failures were addressed.

The scale of collapse

To understand why intervention occurred requires grasping the magnitude of Venezuela's disintegration. Between 2013 and 2020, Venezuela's economy contracted by approximately 75 per cent—a peacetime collapse exceeding the Great Depression in severity. Cumulative inflation between 2016 and 2023 exceeded 1,000,000 per cent, rendering the national currency worthless and forcing informal dollarisation.

Oil production, which sustained 95 per cent of export earnings, collapsed from 3.2 million barrels per day in 1998 to a nadir of 400,000 bpd in 2020—levels not seen since the 1940s. The state oil company PDVSA, once amongst Latin America's most capable enterprises, became effectively insolvent. Infrastructure decayed. Refineries idled. Skilled personnel emigrated.

More than 7.7 million Venezuelans—approximately 25 per cent of the population—fled the country between 2015 and 2025, creating the largest displacement crisis in Latin American history. The healthcare system collapsed: hospitals lacked medicines, equipment and electricity. Life expectancy declined by four years. Malaria and other preventable diseases resurged.

This humanitarian catastrophe provided the stated justification for intervention. Yet beneath moral arguments lay resource calculations that merit scrutiny.

The legal fault line

Under the UN Charter, the use of force against a sovereign state is permitted only under two conditions: self-defence or authorisation by the UN Security Council. No such authorisation existed in Venezuela's case. Nor was there a credible claim of imminent armed attack.

Institutions such as Chatham House, the International Crisis Group, and legal scholars writing in journals of international law have long warned that bypassing multilateral legality creates a precedent that erodes protections for all states, not merely those targeted. Once legality becomes discretionary for powerful countries, it ceases to function as law and becomes a policy instrument.

This distinction matters. The post-1945 order was not built on moral perfection, but on restraint. It recognised that power unconstrained by rules produces instability, even for those who wield it.

Venezuela's intervention risks normalising something that had been fading from practice: régime change by force outside multilateral consensus.

Why "it's about the oil" no longer suffices

For decades, Venezuela's identity in global markets rested on oil. It still holds the world's largest proven oil reserves, estimated at around 300 billion barrels, largely concentrated in the Orinoco Belt. More strikingly, geological estimates suggest over 1.5 trillion barrels of extra-heavy crude in place, far exceeding what has so far been commercially recoverable.

Yet oil alone does not explain recent events.

Venezuelan crude is extra-heavy, with high sulphur content. Refining it requires specialised upgrading facilities, many of which were damaged or idled during years of sanctions and neglect. Restarting production at scale would require tens of billions of dollars in capital, advanced refining technology, skilled engineers (many of whom emigrated), stable electricity and transport infrastructure, and years—not months—of uninterrupted operation.

The International Energy Agency has repeatedly noted that reserves are not production, and production is not revenue unless logistics, refining capacity and political stability align. This is why Venezuela's oil output collapsed so dramatically.

Oil still matters—but it no longer tells the full story.

Chevron and the logic of patience

Chevron's continued presence in Venezuela is often misunderstood as opportunism. In reality, it reflects long-term positioning. Chevron has operated in Venezuela for close to a century, frequently without consistent profitability. Heavy crude requires custom refineries, and returns are volatile. Yet the firm remained whilst others exited because exit would have forfeited optionality.

When US sanctions loosened in 2022, permitting limited Venezuelan oil operations, Chevron was amongst the few firms still embedded enough to operate. This was not a sudden discovery of value, but the payoff of endurance. The company maintained technical expertise, geological knowledge and relationships with Venezuelan counterparts even during the harshest sanctions years.

Heavy crude projects typically require 7 to 15 years to reach break-even, according to IEA upstream investment studies. This timeline explains why narratives of "quick extraction" prove implausible. Resource exploitation is slow, bureaucratic and politically fraught. Ownership of reserves does not translate into immediate leverage.

Following the January 2026 intervention, Chevron found itself positioned to expand operations rapidly under a new government receptive to foreign investment. Competitors who had fully withdrawn faced years of delay in re-establishing presence. This competitive advantage—secured not through sudden action but through patient maintenance of foothold—exemplifies how resource politics rewards long-term strategic positioning over short-term profit-maximisation.

The mineral dimension: a quieter prize

Beneath Venezuela's southern territory lies a different asset class altogether. The Guiana Shield, extending across Venezuela, Guyana, Suriname and northern Brazil, is amongst the most resource-rich geological formations on earth.

Beyond oil, the region contains substantial deposits of gold (estimated at 7,000 tonnes, roughly equivalent to Australia's reserves), industrial diamonds, bauxite (Venezuela ranks 7th globally in reserves), coltan (columbite-tantalite, essential for capacitors in smartphones and military electronics), and rare-earth-adjacent minerals crucial for electronics and defence systems.

The Orinoco Mining Arc, established in 2016, spans roughly 112,000 square kilometres—12 per cent of Venezuela's total territory. Independent estimates from NGOs and UN agencies suggest that illegal and informal mining alone generates between $7bn and $14bn annually—rivalling formal oil revenues during sanctions years. Much of this wealth flows to armed groups, corrupt officials and transnational criminal networks rather than state coffers.

This matters because the global economy is shifting. Power is no longer derived solely from hydrocarbons, but from control over future supply chains: batteries, semiconductors, aerospace alloys and military hardware. China's 2023 restrictions on gallium and germanium exports illustrated how minerals have become instruments of statecraft. In this context, Venezuela's mineral belt is not peripheral—it is strategic.

The strategic minerals doctrine: policy nobody discusses

What is rarely acknowledged publicly is that resource competition has been formally embedded into Western security strategy. The 2022 US National Security Strategy explicitly identified "secure and resilient supply chains for critical minerals" as a core national security priority. This was not rhetorical. It represented a doctrinal shift: resources that were once economic questions became security imperatives.

The strategy noted that over-reliance on "countries of concern" for critical materials creates "strategic vulnerabilities that rivals can exploit". Translation: dependency on China for rare earths, lithium processing or battery manufacturing represents a threat comparable to energy dependency on hostile powers. The document called for "diversification of supply sources" and "securing partnerships with resource-rich nations"—language that sounds benign but carries operational implications.

In March 2023, the European Union enacted the Critical Raw Materials Act, mandating that by 2030, no more than 65 per cent of the EU's consumption of any strategic raw material can come from a single third country. The Act designated 34 critical materials and 17 strategic materials, including lithium, rare earths, cobalt, nickel, gallium and germanium. It established binding targets: at least 10 per cent of annual consumption must be domestically extracted, at least 40 per cent processed within the EU, and recycling must supply at least 25 per cent.

These targets are unachievable without securing new external sources. Europe possesses minimal domestic deposits of most critical minerals. Processing capacity takes years to build and requires enormous capital. The only viable path is partnerships with resource-rich countries willing to accept European investment on favourable terms. Venezuela, with its vast but underdeveloped mineral deposits, fits this requirement precisely—provided political arrangements align.

This is the context mainstream coverage omits. Venezuela's intervention occurred not in isolation, but within a framework where Western governments have legally committed themselves to securing alternative mineral supplies on accelerated timelines. When a major resource-rich state collapses precisely as these mandates become binding, the timing is not coincidental—it is structurally convenient.

The Greenland parallel: a pattern emerges

Venezuela is not unique in facing resource-driven pressure. Greenland, a self-governing territory within the Kingdom of Denmark with only 57,000 inhabitants, sits atop vast deposits of rare earths, uranium, zinc, lead and potentially significant oil reserves. Climate change is making these resources increasingly accessible as ice sheets retreat.

In 2019, reports emerged that President Donald Trump had inquired about purchasing Greenland from Denmark. The proposal was publicly dismissed as absurd. Yet in geopolitical terms, it was entirely logical: Greenland's strategic location (Arctic shipping routes, proximity to North America) combined with resource wealth make it valuable. China had been investing heavily in Greenland's mining sector and infrastructure, raising Western concerns about influence.

Subsequently, the United States reopened a consulate in Nuuk (Greenland's capital) in 2020 after decades of absence, increased development aid, and expanded military cooperation. In 2023, Greenland's government faced sustained pressure to grant preferential mining licences to Western firms over Chinese competitors. This occurred quietly, through investment conditions and regulatory requirements rather than public confrontation.

The pattern is instructive. When a territory possesses strategic resources and weak institutional capacity to resist external pressure, influence arrives through multiple channels: diplomatic presence, development financing, security cooperation and investment conditions that favour certain partners. Greenland, with its small population and limited bureaucratic capacity, cannot effectively resist coordinated pressure from major powers—even when that territory remains formally sovereign.

Venezuela faces similar dynamics, but at greater scale. Its larger population and political complexity make outright purchase impossible. Yet institutional collapse creates opportunities that function similarly: a weakened state becomes receptive to external influence in exchange for reconstruction capital, debt relief and market access. Sovereignty persists on paper; control shifts in practice.

When resources meet instability: a recurring pattern

Venezuela is not the first country where extraordinary resource wealth has coincided with extraordinary instability—nor will it be the last. The historical record is instructive.

Libya possessed Africa's largest proven oil reserves—48 billion barrels. Production before the 2011 NATO intervention reached 1.6 million barrels per day. Yet after foreign intervention, the collapse of central authority fractured oil production amongst rival militias. Production fluctuated wildly between 200,000 and 1.2 million bpd depending on which faction controlled which terminals. Oil wealth did not translate into reconstruction; instead, it became a prize over which armed groups fought. A decade later, Libya remains fragmented, with two competing governments and persistent violence.

Syria, whilst not an oil giant, sits astride strategic energy corridors and possessed modest oil fields producing approximately 400,000 bpd before conflict. Competing external interventions—by Russia, Iran, Turkey, and Western powers—transformed resource zones into prolonged theatres of conflict. Control over eastern oilfields changed hands repeatedly between the Syrian government, Kurdish forces, ISIS and other factions. Infrastructure damage exceeded 60 per cent according to UN assessments. Production remains suppressed at roughly 90,000 bpd. More than 6 million Syrians remain displaced externally, with millions more internally.

Iraq offers another cautionary example. Despite immense oil reserves—the world's fifth-largest at 145 billion barrels—decades of intervention and sanctions left institutions weakened. Following the 2003 invasion, production collapsed from 2.5 million bpd to below 1 million. Recovery took nearly a decade, reaching pre-war levels only by 2012. Yet political fragmentation persists. According to Transparency International's 2023 Corruption Perceptions Index, Iraq ranks 157th out of 180 countries. Oil revenues remain vulnerable to capture by sectarian élites rather than being broadly distributed. Resource wealth, rather than enabling development, became a source of internal contest.

These cases reveal a pattern. Resource abundance does not prevent instability. Under certain conditions, it intensifies it. High-value, immobile resources attract external interest whilst simultaneously weakening domestic accountability. When institutions are fragile, resource rents substitute for taxation. Governments no longer depend on citizens for revenue, and citizens lose leverage over the state. Political economists describe this as the rentier dynamic.

The rentier trap, revisited

Venezuela exemplifies a classic rentier trajectory—but with modern twists. Oil revenues once financed social programmes, subsidies and political loyalty under Chávez. When prices fell and mismanagement accumulated, the state hollowed out. Sanctions accelerated the collapse, but did not create it.

What is new today is the internationalisation of the rentier trap. External actors are no longer merely buyers of resources. They increasingly shape who controls them, under what conditions, and through which political arrangements. When this happens, domestic politics becomes subordinate to external bargaining, and sovereignty erodes in practice even if it remains intact on paper.

This is the deeper danger. Once force replaces negotiation and law becomes optional, the resource curse expands beyond national borders. It becomes a systemic feature of the international order.

Political financing and the pressure to break rules

Resource politics is rarely only about geology. It is also about money—specifically, the financing of political power. Academic work by the OECD, Transparency International, and scholars of political economy has consistently shown that sectors with high rents—oil, mining, defence, infrastructure—exert disproportionate influence on political systems because they generate concentrated profits that can be mobilised for lobbying, campaign finance and indirect political support.

In the United States, campaign finance law permits extensive corporate political spending through political action committees (PACs), donations routed via industry associations, and revolving doors between government and industry. During the 2024 election cycle, the oil and gas industry contributed over $170 million to federal candidates and parties according to OpenSecrets data. Energy sector executives frequently transition into regulatory positions, and former government officials join energy company boards.

Whilst none of this is illegal per se, it creates structural incentives. When electoral campaigns are costly and competitive—the 2024 US presidential race exceeded $14 billion in total spending—politicians become more dependent on large donors. That dependency can translate into policy urgency: promises made during campaigns become expectations after victory.

In resource-heavy sectors, the time horizon matters. Oil and mining investments often require decades to mature. Political cycles, by contrast, are short—typically two to four years. The temptation is therefore to use state power—sanctions relief, diplomatic pressure or force—to accelerate outcomes that markets alone cannot deliver quickly.

This is how political financing does not merely influence policy, but can encourage legal shortcuts, particularly when leaders frame their actions as serving national interest. History shows that this pressure can push administrations toward actions that legal advisers would otherwise caution against. The Iraq intervention of 2003, whilst publicly justified on security grounds, occurred in a context where energy companies had significant access to policymakers and stood to benefit from regime change.

The geopolitical dimension: China, Russia and regional responses

Venezuela's crisis unfolded within a broader geopolitical contest. Between 2007 and 2020, China extended over $60 billion in loans to Venezuela, secured against future oil shipments. These "loans-for-oil" arrangements gave Beijing substantial influence whilst providing Caracas with financing unavailable from Western sources. When Venezuela defaulted on debt payments, China became Venezuela's largest creditor and de facto stakeholder in the country's resource future.

Russia provided military support, including advisers, weapons systems and diplomatic cover at the UN Security Council. Moscow's interest was partly strategic—maintaining influence in the Western Hemisphere—and partly commercial, with Russian oil companies holding substantial Venezuelan assets. Cuba sent thousands of advisers and intelligence personnel, sustaining Maduro's security apparatus.

The January 2026 intervention therefore risked not merely Venezuelan stability, but regional and global balances. Brazil and Colombia, Venezuela's neighbours, supported intervention primarily to manage the humanitarian crisis overwhelming their borders—7.7 million Venezuelan refugees created immense fiscal and social pressure. Yet their participation also positioned them for influence over any post-Maduro settlement.

China and Russia condemned the intervention as illegal but did not actively resist militarily, calculating that direct confrontation risked escalation beyond acceptable bounds. Both, however, reserved their positions on recognising any new Venezuelan government, maintaining leverage for future negotiations over debt, contracts and resource access.

Not de-dollarisation—but denial of alternatives

Some commentators argue Venezuela's resources were seized to "back" the US dollar. This misunderstands monetary reality. The dollar does not require commodity backing. What matters instead is strategic denial: preventing rival powers from accessing future resources that could underpin alternative trade systems.

True de-dollarisation, as IMF and BIS research repeatedly notes, is gradual. It occurs through reduced dollar share in reserves (declining from 71 per cent in 2000 to 58 per cent in 2024), more trade invoiced in non-dollar currencies (particularly yuan and euro), and less accumulation of US Treasuries by surplus economies. No single intervention can end dollar dominance. But controlling chokepoints in resource supply can slow diversification by competitors.

In this sense, Venezuela is less about propping up the dollar than about constraining the options of others—particularly China, which had positioned itself to expand yuan-denominated oil trade through Venezuelan channels.

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The imperial temptation returns

The danger lies not in Venezuela alone, but in the precedent it sets. Imperial interventions were once justified by resource security, civilising missions or strategic necessity. History shows they rarely delivered stability, and often produced blowback lasting generations.

In the early twentieth century, oil concessions in Persia (Iran), Iraq and parts of Latin America were often secured through political pressure and élite bargains. The Anglo-Persian Oil Company (later BP) obtained Iranian concessions through agreements with autocratic rulers that bypassed parliamentary oversight. Standard Oil's activities in Latin America were frequently backed by US diplomatic and occasionally military intervention. These arrangements delivered short-term supply security, but sowed long-term resentment.

The 1951 nationalisation of Iranian oil under Mosaddegh, the 1979 Iranian Revolution, and multiple Latin American nationalisations were reactions to those earlier interventions. The lesson is not that force never works. It is that force without legitimacy produces delayed costs. In Iran's case, those costs included the 1979 revolution, forty years of hostile US-Iran relations, and persistent regional instability.

In a multipolar world, where military, economic and technological power are widely distributed, such actions carry greater systemic risk. The old imperial toolkit was designed for a world with fewer actors and slower feedback loops. Force can remove leaders. It cannot rebuild legitimacy, institutions or social contracts.

What happens next?

As of February 2026, Venezuela's future remains uncertain. An interim government, supported by the United States, Brazil and Colombia, assumed control following Maduro's departure. International recognition remains fractured: Western governments and most Latin American states recognised the transition; China, Russia, Iran and several non-aligned nations withheld recognition pending clarification of constitutional processes.

Reconstruction will require years and enormous capital. The IMF estimates Venezuela needs $150-200 billion in infrastructure investment over the next decade merely to restore pre-crisis production capacity. Debt restructuring negotiations with China, Russia and other creditors will determine how much sovereignty Venezuela retains over its resources. Early indications suggest significant concessions will be required.

Humanitarian needs remain acute. The UN estimates 10 million Venezuelans require food assistance. Healthcare infrastructure requires complete rebuilding. Reintegrating millions of refugees will take decades. Whether the new government can establish legitimacy domestically—distinct from international recognition—depends on its ability to deliver tangible improvements to living conditions.

The resource question looms large. Chevron and other Western firms are positioned to expand rapidly. Chinese and Russian interests seek to preserve existing contracts and recover debts. Neighbouring countries expect benefits for managing refugee flows. Venezuelans themselves face the prospect that their resource wealth, once again, may serve external interests more than domestic development.

A wider lesson

Venezuela's collapse did not begin with foreign intervention, nor will it end with it. But the manner in which the crisis was resolved reveals something unsettling: the quiet erosion of norms once thought settled. If international law becomes conditional, then power replaces predictability. For investors, states and citizens alike, that is a poorer bargain.

The tragedy of Venezuela is not only economic ruin or humanitarian catastrophe, grave though both are. It is that a crisis rooted in misgovernance has become a laboratory for testing how far rules can bend before they break—and whether, once broken, they can be restored.

Venezuela is not an anomaly. It is a warning. As the global order fragments, temptations to bypass law in the name of efficiency will grow. But history suggests that when rules are abandoned, outcomes become harder—not easier—to control. Oil may fade. Minerals may rise. Currencies may shift. But one truth endures: power without restraint is costly, even for those who wield it.

If international law becomes conditional, then power replaces predictability. Force without legitimacy produces delayed costs, and in a multipolar world, those costs arrive faster than they once did.