Assessing the Strategic and Economic Implications of U.S. Engagement in Post-Maduro Venezuela

The U.S. military operation to remove Nicolás Maduro in January 2026 has reshaped Venezuela's geopolitical and economic landscape, creating both opportunities and risks for American engagement. While the Trump administration has framed its actions as a stabilizing force, the reality is more complex: Venezuela remains under a de facto authoritarian regime, with hardline figures like Delcy Rodríguez and Diosdado Cabello retaining control. The U.S. strategy appears focused on securing strategic interests-particularly in oil-while avoiding a full democratic transition, a calculus that raises questions about long-term stability and investment viability.

Geopolitical Stabilization: A Transactional Approach

The U.S. intervention, codenamed Operation Absolute Resolve, was justified as a law-enforcement action targeting Maduro's alleged narcotrafficking ties. However, the broader goal is clear: to reassert American influence in Latin America and counter China's growing presence in Venezuela's energy sector. Prior to the U.S. operation, China received 85% of Venezuela's oil exports, a lifeline for its refining industry. By disrupting this flow, the U.S. has forced Beijing to accelerate energy diversification efforts, including investments in nuclear and fusion technologies.

The Trump administration's approach, however, is transactional rather than transformative. Delcy Rodríguez, now interim president, is expected to govern under U.S. oversight, prioritizing oil production and counternarcotics cooperation over democratic reforms. This strategy aligns with the "Donroe Doctrine," a modern iteration of the Monroe Doctrine aimed at reasserting U.S. dominance in the Western Hemisphere. Yet, the continued presence of Chavista loyalists and the lack of a clear transition plan risk entrenching authoritarianism, deterring opposition leaders like María Corina Machado from returning to Venezuela.

Energy Investment Opportunities: A High-Risk, High-Reward Proposition

Venezuela's oil sector, with 303 billion barrels of proven reserves, represents a tantalizing opportunity for U.S. and international investors. However, the path to unlocking this potential is fraught with challenges. Current production stands at 927,000 barrels per day, far below the 3.5 million peak of the 1990s. Reviving output would require $70–80 billion in investment, years of infrastructure rebuilding, and a stable political environment.

The Trump administration has signaled its intent to facilitate this process by selectively rolling back sanctions and authorizing oil exports. Executive Order 14373, for instance, shields Venezuelan oil revenues held in U.S. Treasury accounts from attachment by creditors, centralizing control over these funds. Meanwhile, U.S. Gulf Coast refiners stand to benefit from increased imports of Venezuelan heavy crude, which could widen price differentials with WTI and improve margins.

Yet, corporate caution persists. Major U.S. oil companies like ExxonMobil and ConocoPhillips have hesitated to reenter the market due to legal risks and past expropriations. Instead, global trading houses have secured early deals to export Venezuelan crude, leveraging their risk tolerance and logistical expertise. For long-term investment, clarity on governance reforms and sanctions relief will be critical. J.P. Morgan projects that production could rise to 1.3–1.4 million barrels per day within two years of a political transition, but this assumes a stable regime and sustained capital inflows.

Economic Realities: A Nation in Crisis

Despite the focus on oil, Venezuela's broader economy remains in freefall. Inflation is projected to hit 270% in 2025, with 47% of households struggling to make ends meet. The bolívar's collapse has forced reliance on U.S. dollars for basic purchases, while food insecurity affects 40% of the population. Even among the wealthiest 20% of households, 54% report difficulty affording food.

The brain drain-7.7 million Venezuelans have emigrated since 2015-has further crippled long-term recovery. Labor market data reveals only 19% of adults employed full-time in 2025, one of the lowest rates in Latin America. These conditions suggest that even with improved oil production, Venezuela's economic recovery will be slow and uneven. Migration is likely to remain a mix of outward movement and selective returns, with stability hinging on political and economic reforms.

Legal and Geopolitical Risks

The U.S. legal framework for managing Venezuela's oil sector is both a tool and a constraint. Executive Order 14373 grants the Treasury Department control over oil revenues, but it does not convert existing commercial bank balances into protected funds, leaving gaps in the sanctions regime. Additionally, the administration's debt-for-equity swap proposals-aimed at repaying expropriated assets- depend on Venezuela's commitment to governance reforms, a condition that remains unmet.

Geopolitical risks further complicate the outlook. The U.S. military's controversial use of force-such as blowing up drug-laden boats- has drawn international criticism and raised legal concerns. Meanwhile, the Trump administration's refusal to clearly endorse democratic opposition figures has left a power vacuum, with Cabello and other hardliners continuing to enforce repressive policies. These dynamics could trigger mass protests or military instability, reintroducing volatility into oil markets and sovereign debt pricing.

Conclusion: A Calculated Gamble

The U.S. engagement in post-Maduro Venezuela is a calculated gamble: leveraging oil as a strategic asset while avoiding the costs of a full-scale democratic transition. For investors, the rewards are substantial-Venezuela's oil reserves could stabilize global markets and enhance U.S. energy security. Yet, the risks are equally profound. Political instability, legal uncertainties, and a collapsing economy create a high-stakes environment where even the most well-funded projects could falter.

For now, the Trump administration's transactional strategy appears to prioritize short-term gains over long-term stability. Whether this approach will yield a sustainable political transition or merely prolong Venezuela's crisis remains to be seen. What is clear, however, is that the U.S. has reasserted its influence in the region-and the world is watching how this high-risk experiment unfolds.