A War for Oil: The US Economic War on Venezuela

A Bridge Too Far

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It resembled something from a post-apocalyptic setting in a movie: images of the blocked highway bridge linking Colombia to Venezuela, silent and desolate containers behind fences, not a person in sight, no movement. It was like a makeshift monument to a people’s understanding of how “humanitarian aid” is used by empire to subvert, provoke, and subjugate. Two US aid trucks arrived at the border crossing on February 5, only to find their way blocked—not the only time US AID has been rejected in Latin America in recent times. Some suspected that the US was looking to create an international incident at the border, as a provocation for US military intervention. “LET THE AID REACH THE STARVING PEOPLE,” an ever-expanding Mike Pompeo, the US Secretary of State, bellowed in Twitter–the same administration demanding a permanent wall on its southern border, decried a makeshift temporary blockage at one of Venezuela’s four border crossings with Colombia. A UN spokesman, Stephane Dujarric, criticized the US’ cynical manipulation of “aid”:

“Humanitarian action needs to be independent of political, military or other objectives. What is important is that humanitarian aid be depoliticized and that the needs of the people should lead in terms of when and how humanitarian aid is used”.

UN Secretary General Antonio Guterres also firmly stated that, “Humanitarian aid should never be used as a political pawn”. The brazen, transparent move of the Trump administration threatened to reveal “humanitarian aid” as such in a bold, ugly new light: as a mere tool of imperial intervention, the missionaries’ favourite way to bait desperate locals. The risk that this perception might acquire greater currency is one which the UN, with its various aid programs, cannot afford.

President of Venezuela, Nicolás Maduro

President Maduro obviously saw through the US move:

“The package is very nice on the outside: humanitarian aid. But on the inside it brings the poison of humiliation. It tries to cover up what is the biggest crime committed, the crime of stealing resources through the blockade and the sanctions of the United States government on Venezuela”.

Elsewhere, President Maduro added:

“We are not beggars. The humanitarian aid is a show to humiliate us and is intended to justify military aggression; a macabre plan which does not hide the robbery of more than $10 billion from our nation by the United States. If they want to help, they must stop the blockade, the persecution, and the aggression against Venezuela”.

The barricade was to prevent a foreign power from abducting a nation, by providing Band-Aid support after putting in motion the forces needed to destroy the economy. (The bridge in question has, some say, been closed since 2016, yet the Colombian authorities reported they monitored its closing on February 5, 2019.) On February 4 in Canada, the “Lima Group” also developed plans for sending “aid” to Venezuela.

Questions about a War for Oil

What the images also underscored was the economic nature of this entire conflict, one imposed on Venezuela by the US. In North America, politicians and the media (if that distinction is even plausible) routinely instruct us that “socialism has failed” in Venezuela, and now in the US a caricature of “Venezuela” is used to mock and dismiss the new brand of “domestic enemies,” the so-called “socialists”. The question however is: what role has the US itself played in bringing Venezuela’s economy to its knees? Another question is: is the Venezuelan case an example of the US’ “war for oil”? Trump boasts that the US has achieved supremacy as a producer of energy, and presumably does not need Venezuela’s oil, so we have another question: how do we know that oil matters in this case, and how does it matter? We also need to remind ourselves of how, historically, oil occupies a large place in Trump’s foreign policy thinking. Knowing that, what does it say about the Venezuelan opposition’s judgment? And if this really is a “war for oil,” then: what does this tell us about the role of “democracy promotion” in the US’ effort to “save” Venezuela?

“To the Victor Go the Spoils”: What Oil Means for Trump

First, let’s recall how much oil matters in Trump’s foreign policy thinking, which he himself has put on the record. In his book, Time to Get Tough: Make America Great Again! first published in 2011 and then republished in 2016 for his presidential campaign, Trump writes in a passage dealing with Iraq something that all Venezuelans should pay attention to, since it reflects on the kind of deal the opposition leaders are making with Trump:

“When you do someone a favor, they say thank you. When you give someone a loan, they pay you back. And when a nation like the United States sacrifices thousands of lives of its own young servicemen and women and more than a trillion dollars to bring freedom to the people of Iraq, the least—the absolute least—the Iraqis should do is pick up the tab for their own liberation. How much is it worth to them to be rid of the bloodthirsty dictatorship of Saddam Hussein and to have gained a democracy in which they can vote and have a freely elected parliament?” (Trump, 2011, p. 9)

That passage comes from chapter 2 of his 2011 book, a chapter he titled: “Take the Oil”. A subsection of that chapter is titled, “To the Victor Go the Spoils”. When the subject switched to Libya, Trump’s lust became even more acute. Trump wrote that if the Libyan rebels had come to him asking for help, he would have told them:

“Sure, we don’t like the guy [Gaddafi] either. We will help you take out Gaddafi. But in exchange, you give us 50 percent of your oil for the next twenty-five years to pay for our military support and to say thank you for the United States doing what you could never have done on your own”. (2011, pp. 102-103).

Thus for a military campaign that Trump admitted cost the US no more than $1 billion, he would have wanted Libya to pay the US what amounted to grand total of $129 billion—the cost of 50% of Libya’s oil production, for 25 years, at current prices in 2016. At 129–1, that is extreme asymmetry even by American standards that tolerate gross inequality.

For the sake of wearing a presidential sash and being called “Mr. President,” a figure like Juán Guaidó and his supporters are apparently willing to exchange Venezuela’s wealth. Ignorance is no excuse here, since Trump has put his thoughts down, black on white, and has repeated this theme. Trump is not out to get Maduro, no matter what he says; he is out to get the oil.

Trump has long resented the power of OPEC, a cartel which he would love to smash. Anything that rivals US supremacy, in his view, is deserving of destruction. Let’s be very clear then: demolishing Venezuela’s ability to produce or market its oil, is a valid and real objective in Trump’s worldview.

What cannot be broken, needs to be stolen. Nothing can be left behind for Venezuelans. This will become imperative—Trump is almost certain to fail in getting China to bend its knee as a result of these ongoing trade negotiations about which we conveniently hear so little in the media (because there is so little to raise American nationalists’ hopes). So Trump will need loot from elsewhere to parade in front of the eyes of his supporters. We may not have gotten what we wanted from China, but we more than made up for it with Venezuela.

On Venezuela, How do We Know that Oil Matters for the US?

What “threat” does Venezuela pose to the United States? What would justify US intervention in Venezuela, especially with a US president who has made so much hay of his withdrawals from Syria and Afghanistan, and has promised not to engage in “nation building”? Or, as President Nicolás Maduro plainly asked,

“What casus belli does Donald Trump have against Venezuela? Have we got weapons of mass destruction? Are we a threat to the US? You know what the real casus belli is here?”

—and this is how Maduro answered his own question: “Venezuelan oil. Venezuela’s riches— gold, gas, diamonds, iron, water”.

Venezuela has the world’s largest proven oil reserves.

If oil did not matter, and it was simply a question of “democracy,” then the US could just as well have applied this policy to Honduras and Haiti, its two client states in the region which are such capitalist showcases of success (whose major export these days are…people). Elections in recent years have been plainly rigged, in both cases. Instead, Trump recognized Honduras’ Juán Orlando Hernández after he took power following an election that was widely observed as fraudulent, nor has Trump condemned his predecessor’s involvement in electoral fraud in Haiti. If mismanagement and economic crisis were Trump’s concerns, then he has another of the region’s capitalist showcases to deal with, Puerto Rico (whose indices of capitalist success are a debt crisis, and that it too is a major exporter of people). Puerto Rico, Haiti, and Honduras were each used as US pawns, as “bulwarks against communism”—and they don’t look too pretty for it. But when the putative Communist Party leader Xi Jinping recently declared himself president-for-life in China, the avowed anti-socialist and democracy-loving Trump should not have praised the move as he did.

So what can we learn from this mess of hypocritical garbage? A number of useful things:  oil matters, but what also matters is who holds it—hence Saudi Arabia’s lack of democracy is not up for discussion. Saudi Arabia is a US ally, and Bolivarian Venezuela is not. Democracy matters too, but only for states that are targets of US destabilization. Americans do not care about democracy in their own country, so we cannot take their concerns about any other country seriously. Not even “socialism” bothers the US, as long as the socialists in question are willing to finance American consumption. Unlike China and Saudi Arabia, Venezuela cannot afford to keep a bankrupt American lifestyle on life-support. Unlike Honduras, Haiti, and Puerto Rico, Venezuela is unwilling to serve as a pawn of empire, only to reap the rewards of pauperization.

While I am on record as being loath to support simplistic “war for oil” theses, which see US interventions everywhere and anywhere as drawn to some hitherto unknown oil reserve or some hypothetical discussion of an oil pipeline that only exists on blueprints, I think that Venezuela’s case can be convincingly argued as one in which oil is the prime concern. That fact is also manifested in the pattern of US economic warfare against Venezuela, which was also designed to make it look like “socialism” was a “failure”. The analysis has to go where the facts are.

War for Oil or Failure of Socialism?

Venezuela became a target of US aggression as a result of nationalizing over 1,000 companies, as well as the oil fields owned by US oil giants Exxon Mobil and Conoco Phillips. For similar reasons, it has been the target of Canadian aggression, led by corporations in the oil sector and gold mining interests that felt they had been “burned” in Chavez’s Venezuela (thanks to Yves Engler for his continued, detailed exposition of Canadian foreign policy). The US has been engaged in economic warfare against Venezuela, with US sanctions directly harming the Venezuelan economy. The “failure of socialism” trope so abundantly over-exploited by the talking heads at Fox News is deceit meant to mask the impact of US economic destabilization, and then blame Venezuelans for it. Selling its intervention as “promoting democracy,” the reality is that the US’ chief concern is economic. And its chief economic concern has for many years and decades been oil, as WikiLeaks recently reminded us by pointing to this State Department cable.

Numerous successive governments in Venezuela have pursued a development policy that is highly dependent on exporting oil, and importing consumer goods, with little diversification of the local economy—there was thus a number of prior oil booms, and busts, with the busts leading to severe economic downturns that adversely affected the working class’ standard of living. However, the current downturn in Venezuela seems to be even more severe than the previous ones. How is that possible? Alejandro Velasco convincingly explained that while the arguments of “oil dependency” and “socialism” seem like plausible explanations, they are dangerously wrong—meaning, not without some merit and some evidence to back them up, but they are incomplete explanations and thus misleading. Venezuela also does not have a “socialist” economy—it is, at best, a mixed economy with a significant private sector. What Velasco leaves out of the frame is something essential to understanding the picture: the fact of US political and economic destabilization. Any analysis that does not include this fact, cannot be an analysis at all.

Though entirely ignored by most of the US media, most of the time, the fact is that the US has engaged in a calculated program of economic warfare against Venezuela, designed to destabilize the economy and impoverish most Venezuelans. Trump escalated the Obama administration’s sanctions, which caused Venezuela’s oil production to plunge. US economic warfare cut Venezuela off from global capital markets; the Trump administration went as far as threatening bankers with 30 years in prison if they negotiate a standard restructuring of Venezuela’s debt. Even the UN Human Rights Council formally condemned the US: it noted that sanctions targeted “the poor and most vulnerable classes,” while it also called on all member states to break the sanctions, and even began discussing reparations the US should pay to Venezuela. (Thanks to Alan MacLeod for this summary.)

In January, it seemed that the US would seek to increase its economic destabilization, and likely move to take control of CITGO’s assets in the US, as it in fact did. Some expected the US to impose an embargo on Venezuela to prevent it from selling oil abroad (which if effectively did), a widening of the US’ economic warfare against Venezuela which violates international law and has inflicted severe human suffering.

Oil was at the front and centre of this whole drama, from the start— Venezuela, as mentioned before, has the world’s largest proven oil reserves. Venezuela’s case was certainly an example of the now classic “war for oil” phenomenon. Trump’s national security adviser, the John Bolton, was quite open about oil being at the forefront of US interests in Venezuela, opining that the coup would be “good for business” in the US. Senator Marco Rubio made virtually identical remarks (when not engaged in comical stunts), about capturing Venezuela’s oil capacity for the benefit of US corporations.

Thus on January 28, the US Department of the Treasury announced new sanctions against the Venezuelan state oil company, PDVSA. This amounted to a de facto oil embargo against Venezuela, as any new exports of Venezuelan oil to the US would only proceed if payments were made to a blocked account which the Venezuelan government could not access—which meant there was no point exporting oil to the US. This would also effectively cease CITGO, as any of its revenues in the US would also go to a blocked account. Also, Venezuela’s gold reserves in the Bank of England were seized, apparently after prompting by a telephone call from John Bolton and Mike Pompeo.

US sanctions, as the Russian foreign minister pointed out, amounted to confiscating Venezuelan state property. This is thinly disguised looting and piracy, Trump’s foreign policy thus successfully revived brigandage in international relations. It also follows a line established by Trump in his book, cited above.

The US’ manoeuvre, which is done with the pretext of diverting control over Venezuelan state revenues to Guaidó, was a little preposterous even if all of the media (including those critical of US intervention) failed to notice the one basic hole in the logic: Guaidó controls no state machinery, has no authority over the central bank, and even his own accounts have been frozen by the government of Venezuela. Guaidó not only has no access to revenues, he has effectively sworn off ever having them: in return for the US installing him, as he hopes, Guaidó has already promised to privatize the Venezuelan oil industry—the loot that Trump is always after.

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Bolton was reported as saying that the US new sanctions would “deprive the Venezuelan government of $7 billion worth in assets and cost around $11 billion in lost export revenue in 2019”; others added that this would cause the Venezuelan economy to “contract by an additional 15 percentage points as a result of the new sanctions, on top of the 11% decline already anticipated”. This was a direct attack on Venezuela’s economy, and was meant to harm all Venezuelans. Then the US turned around and announced an attempt to send “humanitarian aid” to Venezuela, a move whose obvious cynicism was denounced by Venezuela’s government. While Fox News announced on its February 6 nightly newscast that the Venezuelans “attempted” to block the entry of this “aid,” they misleadingly omitted mentioning that they did indeed block its entry, and the footage of the highway bridge at the border crossing with Colombia clearly showed not a single vehicle or person moving past the barriers completely sealing off the highway. As for the US’ sanctions, Maduro pointed out that by raising oil production, and tapping new markets in China and India, while halting oil exports to the US (which would thus hurt the US back), Venezuela could survive—however, this might be an optimistic outlook.

In fact, it turns out that US oil sanctions on Venezuela are both more immediate and more wide-ranging than what we were led to understand at first. The sanctions promise to utterly devastate Venezuela’s economy, in short order. It’s not just US companies that are being barred from buying oil directly from the Venezuelan authorities and the state-owned PDVSA, but all companies everywhere that have any financial transactions in the US that are barred from doing business with Venezuela. As a result, unable to find alternative buyers right now, Venezuela’s oil is building up. Oil tankers remain offshore, unfilled, because their companies have not paid the PDVSA up front, as demanded. The US, in repeating the kinds of sanctions regimes it imposed on Iraq, North Korea, and Iran, seems to think that by inflicting maximum economic damage, the Maduro government will collapse.

Who Pays the Price? You Do

However, as oil exports quickly fall, and a new phase of Iran sanctions are about to start, international oil prices will likely climb quickly, inflicting economic damage on the working class everywhere, including the US. The US is stuck on this path now, because of the irreversible nature of Trump’s recognition of Guaidó. Guaidó himself seems to be utterly unmoved by all this, and has not denounced the US for its collective punishment aimed at all Venezuelans.

As expected, international oil prices began to rise, during a bitter winter in North America, though it was unclear to what extent the manufactured crisis around Venezuela played a role, at first.

If Americans are serious about a “Green New Deal” (daily hysteria on Fox News suggests that might be the case), then perhaps in the future the “war for oil” will become obsolete. In the meantime, another addiction will require intense rehabilitation: the addiction Americans have for pushing their fists under everybody else’s noses and instructing us what to do and how to live in our own countries. For now, there is no “new deal” even in sight to deal with that addiction.

One thought on “A War for Oil: The US Economic War on Venezuela

  1. Pingback: Fiction Plus Coercion Makes Reality: The Illegitimacy of the US-led Coup in Venezuela – ZERO ANTHROPOLOGY

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