Historical Precedent: How a U.S. Takeover of Venezuela Changes Guyana's Oil Risk

The immediate change in Venezuela's status is stark. On January 3, 2026, the United States launched a special operation to capture President Nicolás Maduro and his wife, marking a direct assumption of control over the nation's sovereign assets in a targeted military action. President Trump has since framed this as a long-term project, stating he expects the U.S. to be running Venezuela and extracting oil from its huge reserves for years. This shift is expected to put Venezuela's longstanding territorial claims over Guyana's Essequibo region "on ice." Analysts note the intervention will likely prompt a collective sigh of relief from energy majors operating in Guyana, as it removes a constant threat to offshore logistics and safety that had been a source of regional risk.

This event echoes historical precedents of foreign powers seizing control of resource-rich nations. The U.S. operation, justified as a targeted exfiltration rather than an invasion, demonstrates the broad executive authority to use military force without congressional authorization, a power that may have limits if extended into prolonged occupation under the 1973 War Powers Resolution. The current setup-a captured leader, an interim government of former loyalists, and a U.S. naval armada offshore-resembles a classic scenario of foreign control, where the new power's primary interest is the extraction of natural resources. Trump's comments that the U.S. will be "taking oil" and "giving money to Venezuela" underscore this extractive framing, treating the nation as a long-term asset to be managed and profited from.

The Guyana Oil Engine: Scale and Strategic Value

The economic transformation driven by Guyana's offshore oil is staggering. Since a blockbuster discovery by Exxon Mobil in 2015, the country has become the world's fastest-growing economy. This boom is now a daily reality, with ExxonMobil and its partners recently announcing they have reached a new production milestone of 900,000 barrels of oil per day. That output is not a single project but the combined result of multiple developments, including the recent startup of the Yellowtail field, which has achieved its initial capacity of 250,000 barrels per day.

This scale of production is central to the strategic value of the Essequibo region. The area, which constitutes around two-thirds of Guyana, is known to be rich in natural resources, and its offshore oil reserves are the engine of the nation's growth. The sheer volume of output-nearly a million barrels daily-demonstrates the immense wealth now flowing from these waters. It also explains why Venezuela's longstanding territorial claims over the region were such a persistent source of risk for energy majors operating there. The U.S. military intervention in Venezuela, which has put those claims "on ice," removes a direct threat to this valuable asset base.

The development pipeline is far from complete. The Stabroek block co-venturers have committed more than $60 billion to develop seven government-sanctioned projects, with several more in the works. Projects like Uaru and Whiptail are each expected to add another 250,000 barrels per day, with operations starting in 2026 and 2027. When the next major project, Hammerhead, begins in 2029, the total production capacity from eight developments could reach 1.7 million barrels per day. This forward trajectory underscores that the Essequibo territory is not just a current asset but the foundation for a decades-long energy business.

Risk Reassessment: From Territorial Bluster to Strategic Dependency

The immediate removal of Venezuela's territorial claims offers a clear near-term benefit, but it introduces a new, more complex layer of risk. Historically, such disputes have often been more about political posturing than actionable conflict. The International Court of Justice (ICJ) has already issued binding provisional measures, a clear legal signal that Venezuela's actions in the Essequibo region are not without consequence The Court indicated that it would hear the Parties on Guyana's Request. Yet the current U.S. strategy of direct resource extraction mirrors a different historical pattern: foreign powers seizing control of resource-rich nations to extract wealth, often creating long-term instability.

The key uncertainty now is how U.S. oversight of Venezuelan funds will affect the legal and financial environment for Guyana's operations. On January 9, 2026, President Trump issued an executive order exempting Venezuelan oil revenues held in U.S. Treasury accounts from attachment or judicial process The EO states that such funds are derived from the sale of natural resources from, or the sale of diluents to, the Government of Venezuela. This move, framed as protecting U.S. national security, effectively shields these funds from claims by Venezuelan creditors or commercial actors. For Guyana, the implication is that the financial ecosystem around Venezuela's oil is being restructured under U.S. control, with potential spillover effects on regional finance and contracts.

This setup creates a novel dependency. The U.S. is not just a neutral party removing a threat; it is positioning itself as the long-term manager and extractor of Venezuela's resources Mr. Trump said on Wednesday evening that he expected the United States would be running Venezuela and extracting oil from its huge reserves for years. This prolonged presence, justified as necessary for stability, could entrench a new regional power dynamic. While the immediate risk of conflict over Guyana's oil is lower, the strategic risk shifts to becoming entangled in a U.S.-led project that may have its own political and financial vulnerabilities. The historical precedent suggests such foreign control can be extractive and unstable, which may not be the ideal backdrop for Guyana's own ambitious development plans.

Catalysts and Watchpoints: The Path Forward

The revised risk picture for Guyana's oil sector now hinges on a few key developments. The immediate catalyst is the U.S. administration's detailed plan for managing Venezuelan oil sales and funds. The January 9 executive order exempting Venezuelan oil revenues from attachment is a foundational step, but the real test is how these funds are disbursed. If the U.S. Treasury, under State Department instructions, begins using these resources to finance Venezuelan operations or infrastructure, it could create a parallel, U.S.-backed economic bloc in the region. This would be a direct signal of cooperation, potentially easing financial constraints for Guyana's partners. Conversely, any move to directly compete for regional oil sales or diluent markets would be a major red flag.

A second critical watchpoint is any formal U.S. policy statement on the Essequibo dispute. The military action has put the territorial claims "on ice," but the U.S. has not yet articulated a diplomatic resolution. A shift from military action to a stated U.S. position on the dispute would validate the reduced near-term conflict risk. More importantly, it would signal whether the U.S. intends to act as a neutral arbiter or as a de facto protector of Guyana's status quo. The absence of such a statement leaves the legal and political framework ambiguous, a vulnerability for long-term investment planning.

Finally, monitor Guyana's own operational and fiscal trajectory. The sector is on a clear growth path, with production already at 900,000 barrels per day and major projects like Uaru and Whiptail scheduled to come online in the next two years. Any change in Guyana's fiscal stance-such as new royalty rates or tax incentives-would be a direct response to this new geopolitical reality. The government's ability to maintain a stable, investor-friendly environment will be crucial as it navigates this dependency on a U.S.-managed Venezuela. The bottom line is that the path forward is less about avoiding war and more about managing a complex new alliance that could either stabilize or further entangle Guyana's oil future.