Why Trump Is Taking the Fight to Venezuela’s Doorstep ‘Venezuela is completely surrounded by the largest armada ever assembled in the history of South America,’ Trump said

 The Trump administration is tightening the net around Venezuela’s oil exports, saying that the country stole American property and that its governing regime is illegitimate.

The “illegitimate Maduro regime is using oil from these stolen oil fields to finance themselves, drug terrorism, human trafficking, murder and kidnapping,” President Donald Trump said in a Dec. 16 post on Truth Social.

White House Deputy Chief of Staff Stephen Miller likewise said on X that the “tyrannical expropriation” of American oil companies’ investments in Venezuela was “the largest recorded theft of American wealth and property. These pillaged assets were then used to fund terrorism and flood our streets with killers, mercenaries and drugs.”

What is the basis for these claims of stolen property and what is at stake in this escalating conflict?

In 2007, the Venezuelan government under then-leader Hugo Chávez seized the country’s last remaining foreign-controlled crude oil assets, situated in the country’s Orinoco Belt. The territory contains the world’s largest crude oil reserves.

American oil majors including Exxon Mobil, ConocoPhillips and Chevron, together with the United Kingdom’s BP, France’s Total, and Norway’s Statoil all had investments under existing contracts with the Venezuelan government to develop the site.

Venezuela under Chávez “blew those contracts up,” Phil Flynn, senior market analyst at The Price Futures Group, told The Epoch Times.

“I think President Trump has a right to be upset.”

Seizing Oil Assets

Venezuela nationalized its oil reserves in 1976, taking control of American oil assets.

“A lot of people ask, ‘What’s the difference between Venezuela and Saudi Arabia and the Middle Eastern countries that all did the same thing?’” Flynn said. “Those countries actually paid compensation.”

In the 1970s, for example, Saudi Arabia’s government took control of Arabian American Oil Company from Exxon, Chevron, Mobil, and Texaco. Other countries that seized assets from Western oil companies in the 1970s included Iran, Iraq, Kuwait, Libya, Algeria, and Nigeria.

The United States took no action against those countries at the time, taking the position that nations had the right to control their own natural resources. In return, however, the countries generally compensated or agreed to compensate oil companies to some degree for the value of their shares, investments, and contracts.

The oil companies that were impacted by Venezuela’s asset seizure filed compensation claims in U.S. and international courts, seeking approximately $60 billion in damages in total. Courts have upheld these claims.

Venezuelan National Assembly President Jorge Rodriguez (top C), First Vice President Pedro Infante (top L), and Second Vice President America Perez (top R) discuss a law with other lawmakers during an extraordinary session at the National Assembly in Caracas on Dec. 23, 2025. The Venezuelan parliament on Dec.23 passed a law imposing lengthy prison terms on any national who supports a United States' oil tanker blockade.

Most recently, in January, the World Bank’s International Centre for the Settlement of Investment Disputes supported a 2022 decision by a U.S. federal court that Venezuela must pay $8.5 billion to ConocoPhillips.

“Venezuela has a documented history of seizing U.S.-owned oil assets, including equipment, facilities, and contractual interests, and then refusing to pay the compensation ordered by international courts,” Jason Isaac, CEO of the American Energy Institute, told The Epoch Times. “President Trump is correct that Venezuela stole assets belonging to U.S. oil companies.”

Venezuelan regime leader Nicolás Maduro has responded that the United States is trying to remove him from power in order to take control of the country’s oil supplies, which were nationalized nearly two decades ago, raising allegations of American colonialism in Latin America.

But Maduro’s claim to legitimacy as Venezuela’s president is also being challenged. In 2024, it was widely reported that Venezuelans voted overwhelmingly in favor of Maduro’s opponent, Edmundo González, to be their next president.

Maduro claimed victory regardless and was able to hold on to the presidency due to support from state security forces.

“Maduro clearly lost the 2024 presidential election and has no right to claim the presidency,” the U.S. State Department said in a Jan. 10 statement while announcing sanctions targeting Maduro and his allies.

Venezuelan leader Nicolás Maduro holds Simon Bolivar's sword as he speaks at rally against a possible escalation of U.S. actions toward the country, at Fort Tiuna military base in Caracas, Venezuela, on Nov. 25, 2025.

Largest Oil Reserves

There is much at stake in this dispute. Venezuela is estimated to hold the world’s largest oil reserves, estimated at more than 300 billion barrels, or 20 percent of the global total, and seven times that of the United States, according to the World Population Review.

In addition, the United States has a particular interest in the heavy sour grade of oil that Venezuela produces. America’s Gulf Coast refineries were built to process this type of oil, versus the lighter, sweeter crude oil extracted from domestic U.S. shale fields, according to an October report by California-based transportation fuels consulting firm Stillwater Associates.

“With supply constraints from Mexico and increased competition for Canadian barrels, alternative feedstocks are in sharper focus,” the report said. More access to Venezuelan oil “would restore, in part, the refining diet U.S. plants were built for in decades prior to sanctions on Venezuela.”

Flynn said the U.S. refining system was largely “built to refine Venezuelan heavy oil.”

Russia is another major supplier of heavy oil, a particularly viscous and dense grade, but those supplies are also under sanction following Russia’s invasion of Ukraine.

“With those supplies tightened by sanctions, it would be a huge win, not only for the United States, but for the global economy, if we saw stability back in Venezuela,” Flynn said.

Restoring access to  Venezuelan exports could allow Gulf Coast refineries to return to the production levels they were built to handle. At its peak in the 1990s, Venezuela was the United States’ largest foreign supplier, providing about one-fifth of America’s oil imports.

“There are a lot of people that are skeptical that if Maduro left, that it would take years to bring back the Venezuelan oil industry, but I don’t believe it.” Flynn said. “I think that the demand for heavy oil could bring that industry back immediately.”

A boat passes by a crude oil tanker anchored on Lake Maracaibo near Maracaibo, Venezuela, on Dec. 18, 2025.

A Country Wrecked by Socialism

Once the wealthiest country in South America and one of the 20th richest countries in the world, Venezuela fell into poverty after electing socialist Hugo Chávez as its president in 1998. A 2024 report by the Council on Foreign Relations states that Venezuela has since become “the archetype of a failed petrostate.”

The oil industry that generated the country’s wealth has been “starved of adequate investment and maintenance,” and has been declining for decades, the report states.

Despite that decline, what remains of its oil industry still generates approximately two-thirds of the government’s revenue, indicating its utter dependence on oil exports. Venezuela’s gross domestic product (GDP) shrank by roughly three-quarters between 2014 and 2021, rebounding slightly in 2023 as the Biden administration loosened existing sanctions on the country’s oil exports.

Early in his second term, Trump reversed the Biden administration’s oil concessions, and the Treasury Department terminated a Biden-era license for Chevron to operate in Venezuela. In July, the administration granted Chevron a license to operate on a limited basis in the South American nation.

On Dec. 16, the president announced a blockade of all sanctioned oil tankers in and out of Venezuela, together with an increased military presence in the region, and designated the regime a foreign terrorist organization. Since then, several oil tankers have been seized.

“Venezuela is completely surrounded by the largest armada ever assembled in the history of South America,” Trump posted on Truth Social. “It will only get bigger, and the shock to them will be like nothing they have ever seen before —Until such time as they return to the United States of America all of the Oil, Land, and other Assets that they previously stole from us.”

The Hugo Chávez petrochemical facilities of the 'El Palito' refinery in Puerto Cabello, Venezuela, on Dec. 18, 2025. President Donald Trump on Dec. 16 announced a blockade of all sanctioned oil tankers in and out of Venezuela.

In parallel, the Trump administration has carried out 29 strikes since September against boats suspected of carrying drugs from Venezuela.

While the blockade announcement was immediately followed by a modest spike in global oil prices, analysts say the overall impact from the embargo on energy markets will likely be marginal.

“Most Venezuelan oil has been going to China through sanction-evading intermediaries using shadow tankers, ship-to-ship transfers, and relabeling schemes,” Isaac said.

“These are discounted barrels sold outside transparent markets to keep the Maduro regime solvent,” he said. “Disrupting that trade mainly impacts buyers who have been ignoring U.S. sanctions, not the global oil market.”

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