Trump's Venezuela Gambit: The Strategic Trade-Offs in a Regime Management Project

The United States has made its choice. This is not a project for a democratic transition. It is a regime management operation built on a stark strategic trade-off: control over Venezuela's oil, secured through managed authoritarianism. The U.S. captured President Nicolás Maduro but left the repressive state apparatus intact, relying on compliant insiders like interim President Delcy Rodríguez to maintain order. The stated objective is to control and revitalize Venezuela's oil sector, with an announced deal to sell between 30 and 50 million barrels of sanctioned oil. In practice, this means the U.S. is using coercive leverage over oil, migration, and security to run the country's direction, not to build democracy.

The administration has been explicit about this role. White House adviser Stephen Miller declared that "the United States of America is running Venezuela." Secretary of State Marco Rubio later refined the claim, stating the U.S. is not "micromanaging day-to-day," but "what we are running is the direction this is going to move going forward." This is a deliberate project of regime management, not regime change. The U.S. can only "run the direction" through three choke points: oil access, sanctions relief, and personal legal exposure. These are the tools it can apply quickly and repeatedly without owning the messy business of day-to-day governance.

The bottom line is that control over oil is the primary strategic objective. Energy Secretary Chris Wright has announced the U.S. intends to oversee Venezuelan oil sales "indefinitely," and President Trump has said U.S. oil firms are "ready" to reenter the country. The deal to sell 30-50 million barrels is a first step in a longer game to revitalize the sector.

Yet this comes at a high political and humanitarian cost. The Chavista regime and its authoritarian rule remain in place, leaving the country in a stage of complete uncertainty and raising fears of continued state repression. For now, the U.S. has chosen a high-risk, high-reward gamble: a compliant state apparatus under U.S. direction, with the promise of oil revenues as the payoff.

The Oil Sanctions Dilemma: Sovereign Risk vs. Energy Security

The U.S. faces a fundamental tension. It needs to unlock Venezuela's oil to bolster energy security and stabilize markets, yet it must maintain the sanctions that provide its leverage. This creates a high-stakes balancing act where sovereign risk and market needs are in direct conflict.

The foundational U.S. sanctions remain in place, creating a complex and risky compliance landscape. As of now, the Treasury Department continues to maintain restrictions, and the removal of Maduro does not automatically lift these barriers. The sanctions, which have been tightened over the past year, are not comprehensive but are broad enough to target the government as a whole. This means any relief is likely to be partial and conditional, defining the sovereign risk for any potential investor. The initial excitement over Maduro's arrest is tempered by the reality that significant trade restrictions remain, complicating efforts to develop business.

The first concrete move illustrates this dilemma. The announced energy deal involves selling between 30 and 50 million barrels of sanctioned oil. This is a near-term cash flow event, not a long-term production ramp. It provides immediate revenue but does nothing to restart the country's crippled oil industry, which has fallen to roughly 800,000 to 1.1 million barrels per day from a peak of 3.5 million. The deal is a tactical move to generate funds, but it does not resolve the core problem of revitalizing infrastructure that requires systematic capital investment.

Adding to the uncertainty are the unresolved legal claims of companies that have long-standing arbitration awards against Venezuela. These firms face open questions about how their prior claims will be factored into any new investment framework. This legal risk introduces another layer of friction, making it harder to attract the sustained capital needed for a true production recovery.

The bottom line is that the U.S. is trying to have it both ways. It wants the market stability and energy security that comes from increased Venezuelan supply, but it also needs to preserve its ability to pressure the interim authorities. The current setup-a deal to sell existing barrels under U.S. oversight while sanctions remain-is a fragile compromise. It provides a short-term liquidity solution but does not address the long-term investment climate. For the strategy to work, the U.S. must eventually offer more durable sanctions relief to incentivize the massive capital commitments required to rebuild Venezuela's oil sector. Until then, the sovereign risk will keep potential investors at bay, and the energy security payoff will remain limited.

Security and Stability: The Calculus of Coercive Leverage

The operational reality of this regime management project is a volatile security environment. The state's security apparatus remains fully operational, staffed by the same figures who enforced Maduro's rule. As NPR reported, pro-regime figures continue to run the security forces and government ministries. This creates a dangerous paradox: the U.S. is relying on a repressive machine to maintain order, even as it has just dismantled the top of that machine. The interim government has already declared a 90-day state of emergency that empowers these forces to detain anyone supporting the U.S. operation. The atmosphere remains very authoritarian, with almost no room for dissent. For any foreign company or investor, this is a fundamental risk. The security forces are not a neutral protector of property; they are a potential source of coercion and extortion.

This risk is compounded by a deep-seated culture of corruption and criminality at critical infrastructure points. The international airport, a gateway for any business presence, is emblematic of the problem. In recent years, the head of security there was rumored to be a criminal ring leader who confiscated passports and extorted hundreds of dollars from travelers. This is not an isolated anecdote. A 2024 survey found over 90% of businesspeople considered corruption a 'significant obstacle' in Venezuela, the highest level in the region. The U.S. has designated two major gangs as Foreign Terrorist Organizations, meaning any material support to them could be a criminal offense. The administration's plan to rebuild infrastructure depends on companies operating in this environment, but compliance with U.S. anti-bribery and anti-terrorism laws becomes a high-stakes gamble.

The administration's doctrine is built on offshore coercive leverage, treating cooperation on oil and migration as instruments of U.S. security. As White House adviser Stephen Miller declared, "the United States of America is running Venezuela." Secretary Rubio clarified this is about controlling the "direction" of the country through three choke points: oil access, sanctions relief, and personal legal exposure. This is a high-risk calculus. The U.S. is managing a fragile, compliant state apparatus by applying pressure from outside, not by building internal legitimacy. The durability of the interim government is the key variable. If U.S. leverage shifts-through a change in administration, a loss of political will, or a failure to deliver on promised sanctions relief-the entire project could unravel. The security forces, loyal to the old regime's power structure, may not follow a new U.S.-backed leader, and the state of emergency could collapse, leaving a vacuum of control.

The bottom line is that the U.S. is running a regime management project on a knife's edge. It is using the existing security apparatus to maintain stability, but that apparatus is both a tool and a threat. The coercive leverage works only as long as the U.S. can credibly apply it. Any miscalculation or retreat could destabilize the entire fragile arrangement, exposing the project's fundamental vulnerability.

Geopolitical Positioning: Countering Rivals and Setting Precedents

The U.S. intervention in Venezuela is not just a domestic policy shift; it is a deliberate act of geopolitical positioning. By capturing Maduro and asserting control over the country's direction, the administration is setting a precedent for great power intervention in the Western Hemisphere. This precedent is a double-edged sword. On one hand, it signals a willingness to use force to secure strategic assets, directly countering the influence of rivals like Russia and China. On the other, it risks straining relations with regional allies who view such unilateral action as destabilizing and a violation of sovereignty.

The U.S. aims to keep flows under control and treat cooperation as an instrument of security, a direct counter to Chinese and Russian outreach. Both powers have long cultivated ties with Caracas, offering investment and political support. By demonstrating it can unseat a leader and install a compliant successor, the U.S. is attempting to reclaim the region's strategic initiative. The operation's stated secondary objectives-tightening the squeeze on Cuba and ending Venezuela's involvement in the drug trade-align with this goal of containing adversarial influence. In essence, the U.S. is framing its coercive leverage as a tool to maintain a stable, pro-American order, contrasting its model of managed authoritarianism with the more open support for autocrats seen from Moscow and Beijing.

Yet this gamble carries significant risks. The operation's questionable legality and its commercial focus, as highlighted by the emphasis on oil access, may undermine the U.S.'s moral authority in the region. As one analysis noted, the choice to target Venezuela was "revealing of President Donald Trump's motive," prioritizing commercial gain over democracy. This perception could alienate democratic partners in Latin America who see the move as a cynical power grab. The administration's reliance on offshore coercive leverage and its preference for working with remnants of the existing regime, rather than empowering the opposition, further complicates its standing. It is managing a fragile state apparatus through pressure, not building internal legitimacy, which may not resonate with allies seeking a more rules-based approach.

The bottom line is that this is a high-stakes gamble to reshape the regional balance of power. The U.S. is betting that the coercive leverage it now wields-over oil, sanctions, and personal exposure-will be enough to deter rivals and maintain stability. But by setting a precedent for unilateral regime management, it also risks creating a more volatile and unpredictable hemisphere. The durability of this new order will depend not just on U.S. resolve, but on its ability to navigate the complex web of regional alliances and the long-term consequences of its own actions.

Catalysts, Scenarios, and What to Watch

The success of this regime management project hinges on a few critical variables. The U.S. has set the stage, but the coming months will test whether its coercive leverage can translate into a stable, productive asset. Three factors will be the key catalysts.

First, watch the pace of infrastructure rebuilding and the resolution of outstanding legal claims. The administration has promised a return for U.S. oil firms, but the scale of the task is immense. Venezuela's production has collapsed to around 800,000 barrels a day from a peak of 3.5 million, and its infrastructure is in ruins. Any meaningful ramp-up will require billions in systematic capital investment. Yet, companies with prior arbitration awards face open questions about how those claims will be handled. If the U.S. cannot provide a clear, fair framework for resolving these legacy debts, it will create a major disincentive for the very foreign capital needed to rebuild. The initial deal to sell between 30 and 50 million barrels of sanctioned oil is a short-term cash flow event, not a signal of a revived production economy.

Second, monitor for any formal, comprehensive sanctions relief package versus a piecemeal approach. This is the single biggest determinant of the investment climate. The foundational U.S. sanctions remain in effect, creating a complex and risky compliance landscape. As one analysis notes, the administration must strike the right balance between providing reliable sanctions relief and maintaining leverage. A comprehensive, durable package would signal a new era and attract major industry reentry. A continued piecemeal approach, however, would keep the sovereign risk elevated and deter long-term commitments. The U.S. is trying to have it both ways-using sanctions as a tool of pressure while also needing to offer relief to incentivize investment. The durability of the interim government will be tested by how quickly and how fully this relief is delivered.

Third, track the durability of the interim government and any shift in U.S. leverage. The project relies on compliant insiders like interim President Delcy Rodríguez to maintain order through the existing security apparatus. But this is a fragile arrangement. If cooperation on oil or migration falters, the U.S. may need to apply more pressure, potentially destabilizing the interim leadership. The security forces, loyal to the old regime's power structure, may not follow a new U.S.-backed leader. The administration's doctrine is built on offshore coercive leverage, treating cooperation as an instrument of security. This works only as long as the U.S. can credibly apply it. Any retreat or miscalculation could unravel the entire project, exposing its fundamental vulnerability.

The bottom line is that this is a high-stakes gamble on managed authoritarianism. The U.S. has captured the prize but not yet built the engine. The coming months will reveal whether its three choke points-oil access, sanctions relief, and personal legal exposure-can be wielded effectively enough to control the direction of Venezuela and unlock its strategic asset.