The U.S. is ready for war with Venezuela with more than a dozen warships and 15,000 troops now in the region. The Trump Administration says it’s about drugs, but some experts say that’s a cover for something else.
Guests
Phil Flynn, senior market analyst at the Price Futures Group. Fox Business Network contributor.
Col. Mark Cancian, senior adviser in the Defense and Security Department at the Center for Strategic and International Studies. Served for over 30 years in the U.S. Marine Corps.
Elias Ferrer, director and political and economic analyst at Orinoco Research, a Venezuela-based research advisory for Latin America and the Caribbean.
The version of our broadcast available at the top of this page and via podcast apps is a condensed version of the full show. You can listen to the full, unedited broadcast here:
Transcript
Part I
MEGHNA CHAKRABARTI: The USS Gerald R. Ford, an aircraft carrier, and America’s largest warship is currently positioned off the coast of Venezuela. So are dozens of aircraft and destroyer ships, and a nuclear-powered submarine that’s stationed in the Caribbean. An estimated 15,000 U.S. military personnel are currently in the region today.
It’s the largest U.S. military buildup near Venezuela in decades. According to President Donald Trump, their mission is to stop the drug trade and terrorism that he says is emerging from Venezuela. Here’s the president on November 27th.
DONALD TRUMP: We’ll be starting to stop them by land also, the land is easier, but that’s going to start very soon. We warned them, Stop sending poison to our country.
CHAKRABARTI: Secretary of Defense Pete Hegseth on December 2nd.
PETE HEGSETH: Poisoning, an intentional poisoning of the American people, killing hundreds of thousands of Americans.
CHAKRABARTI: And here is Secretary of State Marco Rubio on November 12th.
MARCO RUBIO: This is a counter-drug operation.
The president’s ordered it in defense of our country. The Maduro regime is a narco terrorist regime, indicted in the Southern District of the United States for narco terrorism. But the bottom line here is that the president is gonna defend the national interest and the national security of the United States, which is under threat by these terrorist organizations.
CHAKRABARTI: While the administration’s messaging is consistent, it’s not convincing everyone. We’re now hearing even congressional voices claim that a potential war with Venezuela isn’t about drugs. That’s just a cover for something else.
JAKE AUCHINCLOSS: We also need to see the bigger picture.
And the bigger picture is that this is blood for oil 2.0.
CHAKRABARTI: That is Massachusetts Democratic Congressman Jake Auchincloss. He was interviewed before a live audience at WBUR CitySpace events venue last week.
AUCHINCLOSS: We all can remember 20 years ago where Republican President said, There’s this country. It’s got a terrible leader. Let me tell you what a bad leader he is and we’re going to go fix it. We’re going to send some troops on the ground. It’ll be quick though. It’ll be easy. Don’t worry about it.
CHAKRABARTI: Of course, Representative Auchincloss is referring there to the 2003 U.S. invasion of Iraq. Back then, President George W. Bush and his administration first asserted that Saddam Hussein’s weapons of mass destruction were a threat to U.S. national security.
Then the claim was about bringing democracy to Iraq. The weapons of mass destruction did not exist, and Iraq may be a democracy now, but it is a highly unstable one, plagued by corruption and militias. Iraq is the second largest crude oil producer in OPEC after Saudi Arabia. It’s the sixth largest total petroleum liquids producer in the world.
Before the 2003 Invasion, Iraq’s domestic oil industry was nationalized and closed to the Western market. Today it is fully privatized and mostly dominated by foreign firms. The former head of U.S. Central Command and Military Operations in Iraq General John Abizaid said in 2007: Of course, it’s about oil. We can’t really deny that. End quote. Last week, here’s Representative Auchincloss again.
AUCHINCLOSS: It was an awful idea, and it really was a huge part of the collapse in American trust in our institutions, and this guy’s trying to do it again.
CHAKRABARTI: Venezuela happens to have the largest oil reserves in the world.
AUCHINCLOSS: This is not about drugs. I was on the Fentanyl working group. The drugs are coming from China. They’re not coming from Venezuela. This is about oil. It’s about money.
CHAKRABARTI: China is the world’s largest supplier of the chemicals drug smugglers use to make fentanyl. It is cocaine that passes through Venezuela.
However, according to estimates, less than 10% of the cocaine entering the United States transits through Venezuela. Now, representative Auchincloss is a centrist national security focused Democrat. He’s also a veteran of the United States Marines. He deployed to Afghanistan in 2012. And in 2014, Auchincloss was sent to Panama where he led a marine counter narcotics mission.
AUCHINCLOSS: And I would hazard; I’m probably the only member of Congress who actually had boots on the ground in Central America doing drug interdiction operations in the special forces. I did it as a marine reconnaissance officer. I commanded a 60-man mission there. I know how to do it. You work with the Colombians, you work with the Panamanians, you do rivering tactics, you do jungle tactics.
You do not park an aircraft carrier off the coast of Venezuela and throw bombs at fishing vessels.
CHAKRABARTI: Since September, the U.S. military has launched over 22 strikes on alleged drug boats in the Caribbean and Eastern Pacific, killing at least 87 people. So today, what is the Trump administration’s military buildup near Venezuela really about? We’re gonna start with Phil Flynn. He’s a senior market analyst at the Price Futures Group. He has over 40 years of experience following the global oil industry and geopolitics. He’s also a Fox Business Network contributor, and he joins us from Chicago. Phil, welcome to On Point.
PHIL FLYNN: It’s great to be here. Thank you so much.
CHAKRABARTI: So let’s start, first of all, with more background on the oil in Venezuela. How much is there and how important would you describe it for the global oil supply?
FLYNN: We’ve had a historical relationship with Venezuela that has been dealt largely on oil trade.
We’ve had a historical relationship with Venezuela that has been dealt largely on oil trade.
Phil Flynn
In fact, if you go back during the 1970s when U.S. oil production had peaked out, we were looking to other places to meet our needs to meet the demand of our growing economy.
And Venezuela was one of the countries that we looked to. In fact, a lot of our refineries down on the Gulf Coast were built —
CHAKRABARTI: Phil, are you there? Looks like we don’t have him. We’ll try to get him back. Phil, are you there?
Okay. We will try to get him back in just a moment. So while we do that, let’s turn now to Colonel Mark Cancian. He’s a senior advisor in the Defense and Security Department at the Center for Strategic and International Studies. That’s a non-partisan thinktank in Washington. He’s also a retired colonel having served over 30 years in the U.S. Marine Corps, including on overseas tours in Vietnam, Operation Desert Storm, and in the Iraq War twice.
Colonel Cancian, welcome to On Point.
MARK CANCIAN: Thanks for having me on the show.
CHAKRABARTI: Okay. So let me first ask you the national security point of view question regarding Venezuela. How important is Venezuela stability, Venezuela’s governance to U.S. national security?
CANCIAN: U.S. policy has been anti Maduro for over 10 years.
It’s a bipartisan effort. The regime has been enormously destructive of Venezuela, its institutions, its economy.
So the United States has been working to replace that regime, has recognized the opposition. It is important in the United States. Because of course it’s very close. We get a lot of oil from there.
U.S. policy has been anti Maduro for over 10 years.
It’s a bipartisan effort.
Col. Mark Cancian
But it also destabilizes its neighbors. It provides sanctuary for cartels and guerrillas. So there are a variety of reasons the United States has opposed a regime.
CHAKRABARTI: Okay. So I would like you to then respond to what we just played regarding what Representative Congressman Auchincloss said. Also, as a veteran of the U.S. Marines, that from his experience and particularly his experience doing anti-narcotics work with this 60-member military reconnaissance unit in Central America, that what he sees happening right now in the waters off the coast of Venezuela has nothing to do, in his experience, with actual anti-narcotics operations, he said, as you heard, he clearly thinks the U.S. wants to go to war for Venezuela’s oil. What does the current posture of the military in the region tell you?
CANCIAN: The posture is twofold. One is that it is attacking these alleged drug running vessels.
There’s no question that piece is driven by the president’s rhetoric during the campaign, his focus on anti-drug efforts. Part of it is clearly anti-drug. And you can argue about fentanyl not coming through the Caribbean. And that’s likely true, but I think the president is trying to make a point and reduce the flow at least to some degree.
On this question about oil, I don’t regard that as a primary driver. I think these other reasons that stretch back 10 years have been driving our policy. The reason I don’t think it’s oil is that when you look at Iraq, for example, the United States didn’t take over the Iraqi oil. It’s still being run by the Iraqis, although with foreign firms helping them out. If the United States were to overthrow the Maduro regime, the oil would still be the Venezuelans. What you might see though, is the U.S. oil firms going in and helping them reform their oil industry. Their export is down about a million gallons, a million barrels a day.
Getting that back up to where it was would be tremendously helpful for the Venezuelans. I wouldn’t be surprised to see that.
CHAKRABARTI: Okay. So let’s return our focus for a second to the anti-narcotics efforts. Do you think the USS Gerald R. Ford is required for anti-narcotics work?
CANCIAN: Absolutely not. It has a little anti-narcotics value, but it’s very good at striking targets ashore. The Gerald R. Ford, the carrier battle and a variety of the capabilities that we’ve seen, the bombers, for example, that have done missions off the coast. They’re there to threaten the Maduro regime and potentially to launch strikes ashore.
CHAKRABARTI: Okay. So tell me more, you wrote about this, you wrote about Trump’s Caribbean campaign and the data that you were able to analyze behind it. So what sort of did you glean? What data did you look at and what did you glean from it?
CANCIAN: What we gleaned is that the campaign began as a counter narcotics effort, with a side of intimidating Maduro.
But over time, it has shifted to an anti-Maduro effort. We’ve seen assets like the Ford, like the bombers. We’ve seen findings for the CIA, for example, to overthrow the regime that have now focused on regime change.
The campaign began as a counter narcotics effort, with a side of intimidating Maduro.
But over time, it has shifted to an anti-Maduro effort.
Mark Cancian
CHAKRABARTI: But tell me more. How, what the ramp up indicates to you and what steps, if you can predict, that the administration might take with that much firepower poised at Caracas?
CANCIAN: Yeah. We could start with what the administration is not gonna do, and that is, it’s not going to land troops on Venezuela, despite what we heard from the president. There are only a handful of troops in the vicinity, and the Venezuelans have very substantial ground forces.
Our forces would have to be greatly reinforced, and we don’t see any evidence of that right now, but they are well positioned to launch air and missile strikes against targets in Venezuela. Those could be one of three target sets. One would be the cartels themselves going after production facilities.
For example. One would be against the military, particularly the air defense, but also other military capabilities. And the third would be against the Maduro regime. And there, you would see attacks on the headquarters of the party, on the headquarters of the government, and potentially the senior officials … Maduro himself.
Part II
CHAKRABARTI: In many parts of the U.S. government, for a decade at least, there have been calls to regime or to change the regime in Venezuela, away from the Maduro government. Here is Secretary of State Marco Rubio. Now, you heard him earlier talking about how the military buildup is all about drugs and anti-narcotics operations.
But back when he was a U.S. Senator, as early as 2013, he was calling for something else. So here’s then Senator Rubio in March of 2019.
RUBIO: The Maduro regime is a clear danger and threat to the national interest, and I would argue national security of the United States. This sadly is not a new issue for me.
It’s been in the news a not lately, but I’ve been working on this topic along with Senator Menendez since as far back as 2014, 2013. And we’ve been working closely, speaking out about this since that time.
CHAKRABARTI: So that’s current Secretary of State and then Senator Marco Rubio back in 2019. Colonel Cancian, just let me ask you quickly. We always hear, for years have heard members of Congress and various administrations say that the Maduro regime is a danger to the United States national interest. How would you define specifically, if you agree with them, what that danger actually is?
CANCIAN: I think that dangers are threefold. One is about drugs and harboring cartels. Another is about destabilizing the region and allowing guerrilla groups and the cartels to operate on its territory.
But I think there’s also, particularly in Florida, a strong thread of concern about the Venezuelan people, the devastation that Chávez and Maduro have wrecked on their economy and on their institutions. And I think for many of the Hispanic community, that is important.
CHAKRABARTI: Okay. So let’s now listen to a little bit of what Venezuelan president Nicolás Maduro is actually saying. He held a rally in Caracas claiming that the U.S. is waging a campaign of, quote, psychological terrorism in order to force him out. And he refuses to leave, he says, here’s a clip from that rally.
(TRANSLATION)
MADURO: We do not want a slave’s peace nor the peace of colonies. Colony, never. Slaves, never.
CHAKRABARTI: Joining us now is Elias Ferrer. He is director and Pol Political and Economic Analyst at the Orinoco Research Center. It’s a Venezuelan based advisory firm for Latin America and the Caribbean. Elias, welcome to On Point.
ELIAS FERRER: Thank you for having me here.
CHAKRABARTI: Okay, so first of all, pick up on what Colonel Cancian says. How do Venezuelans feel about Maduro and his government?
FERRER: So I think it is fair to say even if there isn’t any reliable polling, that the majority of the Venezuelan people want political change. They want Maduro gone, and we saw that in the election last year, that was unfortunately stolen. But it is very clear, and the reasons are many, right? The economy is about a third or maybe even less of what it used to be about 15 years ago, 10 years ago. And obviously there’s been a lot of human rights abuses and repression.
So it is no wonder that the overwhelming majority, maybe 70%, 80% of the population want political change.
The majority of the Venezuelan people want political change. They want Maduro gone.
Elias Ferrer
CHAKRABARTI: Do they want it with the help of the United States military?
FERRER: So I think here we enter in a different kind of discussion because then there will be people that will feel that they’ve tried protesting, voting and they’ve done everything and nothing works.
So the U.S. military or Trump sending in the troops sounds like the only way that they will ever achieve political change in Venezuela, right? There are certainly people who think like that. There are others who say this is a Venezuelan problem, shouldn’t be solved by a war, which can be disastrous.
And also there’s many people saying if there is a war, you don’t really control the outcome. And it’s left to whoever wins in the battlefield. And the other problem is relying on foreign power. And it is not the same as the opposition successfully taking over the country as the U.S. military taking on Maduro and then it is not in Venezuelan hands.
CHAKRABARTI: So let’s talk a little bit more about that, because I believe one of the presumptions, and again, this is all speculation at the moment, but that if indeed the U.S. military and the Trump administration did use the force buildup that’s going on there in the region to invoke some kind of regime change.
In an ideal situation, the opposition would naturally move in to help stabilize Venezuela. You just said that may not happen. Why?
FERRER: I think it is looking very obvious. And as Mark Cancian said before me, there isn’t a deployment of ground troops, right? We have the Gerald Ford aircraft carrier. We have all this firepower, all these jets, all these bombers, but we don’t have foot soldiers. So essentially what we’re talking about in terms of a possible military operation is some kind of bombing operation, targeted strikes, which could take Maduro out from the picture.
Maybe he could be captured even. But the thing is, we aren’t, we don’t really have anything, any kind of element to ensure what happens after that. So yeah, we might say, okay, once Maduro is gone, the regime is going to collapse. And the opposition, which has a clear leader, María Corina Machado, who won the Nobel Prize. That we’ve got Edmundo González who was a candidate in last year’s election.
You will say, you can say, okay, we’ve got these clear leaders, and then if Maduro was out, the regime collapses. But the reality is that we don’t know what was actually going to happen. And in so many of these regime change operations, we get different outcomes, which can range all the way from a swift transition to civil war, to the capital, losing control of many parts of the country.
And in Venezuela, there’s certainly something that could happen, right? What’s the military going to do? Is it going to accept a new leader? Or is it going to use force to try and defend the privileges that it currently has? Like the military officers right now can own businesses and even operate certain kinds of illegal businesses.
In a country like Venezuela, they might, in a conflict scenario, they might be able to survive for a long time with trafficking oil, gold or drugs, wherever it is. There’s all this wealth that they can use to fund themselves in a potential low or even high intensity conflict scenario.
CHAKRABARTI: So Elias, are you saying that in order to assure some kind of stable transition post Maduro being forced out somehow that would require more U.S. involvement?
FERRER: I think that the key point that I want to make is that we don’t know what is going to happen if there is some kind of military action.
So maybe we end up having a stable country a year later and it’s all fine. Or maybe it’s just civil war or a scenario with the countries fragmented. And then yes. So we just don’t know. And the way to ensure an outcome would be to bring in troops on the ground.
But then that’s a different question because the U.S., the decision makers in the U.S. need to ask themselves, is this something that we’re ready to do? And it sounds most people, most Americans don’t want that. And we’ve seen that with different war power resolutions, with some Republicans sitting on the lines.
They don’t really, sitting on the fence, sorry. They don’t really know if it’s going to be popular to support such a military intervention in Venezuela. And no one has really taken the step of saying that, oh yeah, what we’re going to do is go into Venezuela and remove the regime.
Right? There’s only statements about, oh yeah, Maduro is really bad and we’re gonna fight drugs. But it is a little bit ambiguous, and I think that’s mostly because no one wants to see an actual military intervention where we see boots to the ground.
CHAKRABARTI: Colonel Cancian, would you like to respond to what Elias is saying there?
CANCIAN: Sure. I think it’s very unlikely that the United States would put boots on the ground as an occupation force. Of course, we have still the wounds from Iraq and Afghanistan and the administration has been quite emphatic that they don’t want to do that. I think their plan is that if the Maduro regime were to be pushed out one way or the other, they would have the opposition come in.
And it’s widely regarded as legitimate. The United States regards it as legitimate and let them reestablish control and a new regime in Caracas. And I’ve personally been involved in two of those efforts, two similar efforts. One of which was very successful and one of which was a disaster.
The successful one was Desert Storm. After we kicked the Iraqis out, the Kuwaiti government came back in. They were regarded as legitimate. They were organized, they were to do, and they immediately reestablished control and the U.S. was able to leave. The other example, of course, is Iraq, where we kicked the Iraqi regime out.
But we never had a new regime to come in that was regarded as legitimate. And of course, we ended up in a long counterinsurgency. Now with Venezuela, they’re between the two. I think they’re probably closer to the Kuwaiti example because of the legitimacy of the opposition, but they don’t have experience actually governing the country. So there’s a question mark there.
CHAKRABARTI: Okay. So if you don’t mind, Colonel Cancian, I would like to just probe your experience those two times in the Middle East, because I do think that the ghost of those efforts is very strongly looming over what may happen in Venezuela.
And to your point in Desert Storm, what had happened was the Iraqis had invaded Kuwait. Kuwait was a stable government. It definitely had oil, et cetera, but there wasn’t as internal conflict within Kuwait until the Iraqis invaded. So then the United States and the coalition then in Desert Storm, essentially, as you said, uprooted the Iraqi invaders and kicked them out.
So it makes a lot of sense that the previous Kuwaiti government could very easily come in. There was nothing barring them anymore once the Iraqis were kicked out. But in the subsequent Iraq war, I would say that it’s much, much closer to Venezuela and the U.S. arrogance in terms of civilian leadership at the time was, Hey, we have all of these exiled pro-democracy Iraqi activists.
We’re just going to send them back, stand up a government and we’ll be good to go. The lack of actual planning was shocking, and it led to many more deaths of U.S. servicemen and women, many more deaths of Iraqis, two decades of counter, or almost two decades of counterinsurgency efforts. Do you see any signs that this administration is thinking about that possibility when it talks about regime change in Venezuela?
CANCIAN: I understand that there are discussions going on. We haven’t heard much publicly. And the opposition I think is quite different from the situation in Iraq. The opposition for Venezuela is regarded as legitimate by the U.S. government and by the Venezuelans. The head of the opposition just won the Nobel Peace Prize.
That certainly wasn’t true in Iraq and Chalabi and the exile. So it’s a different situation, but it’s between the two and it’s going to put a lot of pressure on the opposition to hold together and to form a stable, effective government and then to establish its authority throughout the entire country.
CHAKRABARTI: Okay. So I promise that in a few minutes we’ll get back to the question of oil specifically because we will have Phil Flynn back, but since María Corina Machado has been mentioned a couple times. We should hear a little bit of what she’s had to say. Because last July current Venezuelan President Maduro declared that he had won a third term in Venezuela’s presidential election.
The opposition party absolutely refutes that, saying that they are the legitimate winner and that the Maduro regime committed massive fraud in order to steal the election. Now to be clear, the U.S. government does not recognize Maduro as president of Venezuela and has not since 2019. Now to María Corina Machado, who did win the 2025 Nobel Peace Prize for promoting democratic rights for the people of Venezuela.
She’s the leader of the Opposition Party, and in an interview with MSNBC on October 31st, she talks about how she feels about the current U.S. presence near Venezuela. I believe that the increase in pressure, the escalation that’s taking place is the only way to force Maduro to understand that it’s time to go.
Elias Ferrer, you wanna talk about that?
FERRER: Yeah, sure. Like I don’t, I’m not sure which part exactly you would want to refer to. But —
CHAKRABARTI: Okay. No. I’ll be more specific. No, that’s fair. Because it seems like a lot of this discussion on what could happen in Venezuela after U.S. military strike, or the deposing of Maduro, really relies on the opposition party’s ability to quickly, essentially, stand up a new government in Venezuela. Do you hear in that quote from Machado that she or the party believes they could do that?
FERRER: I think on this point, what’s really important is that Maduro himself has realized the importance of this.
And when you see most of the opposition activists and leaders that are being arrested and sometimes forcibly disappeared, even, in most cases we are talking about a structure of María Corina Machado organization. Because Maduro is very aware of the threat that it would represent for the opposition to be organized and ready to take over.
Yeah, I’m not sure what the capacity of María Corina Machado’s party would be right now to actually take over, precisely because of this. And so many members of the position, especially from her affiliated correlation, have been either detained or sent into exile, which actually makes it so much harder.
Even as she’s widely regarded as the leader of the opposition, as the sole and most popular figure out of all of them. And her leadership is undisputed, is you don’t really have a strong structure underneath that, which would be fundamental in any kind of transition.
Part III
CHAKRABARTI: Let’s listen to a little bit about how other leaders in the region are responding. This is from an interview with CNN on November 25th. Where Colombia’s president, Gustavo Petro was asked if he is worried that Colombia could be attacked next by the United States since the Trump administration insists that Operation Southern Spear is about drugs. And President Gustavo Petro said no because the recent attacks on Venezuela, he insists are not because of drugs.
(TRANSLATION)
And the president there is saying: Oil. Columbia doesn’t have oil. Venezuela has the majority or most of the reserves of crude oil in the world. In general, all the wars of this century have been about oil.
CHAKRABARTI: I believe we have Phil Flynn back now. He’s a senior market analyst at the Price Futures Group.
He is got over four decades of experience following the global oil industry and its geopolitical aspects. Phil, are you there?
FLYNN: I am here. I’m sorry about the gremlins today. I don’t know. They’re out to get me today. I don’t know what that’s all about.
CHAKRABARTI: (LAUGHS) It’s no worries. Maybe they don’t want you to talk about the truth about global oil, but —
FLYNN: Maybe not. Maybe not. So they want me silenced, right?
CHAKRABARTI: Let us defy the gremlins. I want to go back to where we lost you. Because subsequently, we heard about the century long relationship that Chevron specifically has had in Venezuela. Now, how important has that relationship been for the United States?
FLYNN: I think it’s been huge, not only for the United States, but for the Venezuelan people. And the Venezuelan economy. When you look at Venezuela, one of their major sources of income, part of their gross domestic product was their oil production, and it also has the ability to do that again in the future.
So while there’s no doubt that the Trump administration’s main focus is stated on the drug cartels, in taking control of a country in our hemisphere, I do think there’s an oil component to what’s going on. And let’s face it, not only does the world need heavy oil like we have built up in this country, it’s an alternative to Russian oil which is also a heavy blend.
So there’s a lot of reasons here, economically, geopolitically, and from a national security standpoint, why Venezuelan oil is so important.
CHAKRABARTI: You said the words heavy blend. Elaborate.
FLYNN: Yeah, it’s heavy. It is. When you talk about oil, it’s like a fine wine, right? You have different blends of oil.
Some are heavier and gunkier, some are lighter. Here in the United States because of the Shell Revolution, we’re producing a lot of light oils, which is great for gasoline in a lot of products, but it doesn’t produce some of the heavier products like diesel fuel. And heating oil and things for factories and concrete in heavy industry.
Those are the type of fuels that the world needs, and everybody uses. And our refiners have really been built over the last 50 years to accommodate that heavy oil to feed the globe really with these kind of products.
CHAKRABARTI: So when you say our refineries, you mean refineries in the United States?
FLYNN: They really have been. When you look at the peak oil production in the United States in the ’60s and ’70s, we looked at other countries to meet our growing demand. Because we couldn’t keep up with it. And we looked of course to the Middle East, and the Middle East nationalizer industry, as did Venezuela.
But Venezuela was in our hemisphere. We were continuing to do a lot of trade with Venezuela, and we really built our refineries in large part because of the closeness, relatively speaking, of their oil, and because it yielded a lot and it was cheaper than a lot of other blends of oil at the time.
CHAKRABARTI: How much of the heavy crude that is being processed in these U.S. refineries now is coming from Venezuela.
FLYNN: Not as much as it used to be. It used to be, I think right now it’s less than 1% or 2%, but at one time I think it was close to 20% of what we refined in U.S. refineries, which was huge.
Not only for us, but for the Venezuelan economy. Now things have changed. Because the U.S. is producing more oil. Things have changed a bit, but when we look at heavy oil, it has really become a cog in geopolitics. Because the countries that need that oil are Europe. Here in the United States, in the heavy oil that yields those kind of fuels are in tight supplies.
And some of the biggest producers of those fuels happen to be Canada. It happens to be Venezuela. And Saudi Arabia. But if we’re not getting those, Russia’s the other one, Russia. And so when we’re putting sanctions on Russian oil, that’s making the Venezuelan barrel that more important from a geopolitical point of view.
CHAKRABARTI: Elias, can I return to you here? Because as we’ve been hearing, there’s a lot of discussion about the economic benefit or essential economic benefit that oil brings to Venezuela. Have the people of Venezuela been feeling that benefit adequately or not?
FERRER: It is not just the benefit, but like the entire Venezuelan economy depends on oil experts.
Yes. So how well the economy does is completely down to how many barrels are being produced and at what price are they being sold. And you can really track the economy just by looking at oil production. And you can see how under Hugo Chávez and Maduro it went down very slowly and gradually.
How well the economy does is completely down to how many barrels [of oil] are being produced and at what price are they being sold
Elias Ferrer
But especially with the drop in oil prices after 2014, and then with sanctions, you see how oil production went to just about 300,000 barrels per day, which is almost nothing. And that’s when you see how the economy dropped, collapsed rather, by about 80% or 75%. And that’s all about oil, the economy. There have been many efforts to diversify the economy, but essentially it is all about the oil. And then we have seen a kind of slow partial recovery affecting some sectors more than others. But it is definitely felt in Venezuela, it cannot be understated.
Because all production has been picking up, and production is back at around a million barrels per day. And you can really feel that there’s more stability in the economy, even if it’s still very far from where it used to be.
CHAKRABARTI: Okay, Phil, let me return back to you on a question about licensing. And Colonel Cancian, I still know that you’re there, I haven’t forgotten about you, but the oil economics is really quite complicated.
So there’s something that happened this summer that I’d love for you to explain, Phil, if you could, because the Trump administration had, I believe, revoked the license that Chevron had with Venezuela in terms of its oil operations there. But then this past July, the Trump administration granted Chevron a six-month license to restart oil production in Venezuela.
And this happened, of course, with President Maduro’s ample approval. He was quoted as saying Chevron has been in Venezuela for 102 years and I want it to have another hundred years of working without problem. And the initial revocation of that license that Chevron had came because of the Trump administration’s desire to crack down on the Maduro government.
So can you explain that flip and what impact that it had both on U.S. refined oil production?
FLYNN: I think it was the carrot and stick approach, right? And when it’s dealing with Maduro, obviously under the last election, where the entire civilized world realizes that Maduro is not the legitimate leader of the country, they had to play tough on Venezuela.
And sadly, that came at the expense of the Venezuelan people once again. The Venezuelan people had been so messed over by the last, the Maduro regime and of course Hugo Chávez, who basically used the Venezuelan oil industry as their political piggy bank to drive their socialist revolution while stealing the Venezuelan’s people’s economy and future.
And that’s where we’re at right now. And I think President Trump tried to negotiate with Maduro, tried to help their economy, help Chevron get some supplies. The world needs it. In winter we use more of this heavy oil to keep warm, not only here, but in Europe. So there were a lot of steps to try to do that, to try to get Maduro maybe to move.
And when that didn’t work, he went back to the full pressure campaign. Now the good news is we did hear a report from Reuters. I hope it’s true, that there could be some backdoor negotiations to cut a deal for Maduro to leave. That was reported by Reuters last week. That would be, I think, one of the best outcomes not only for the world, but for the Venezuelan people. They’re the people that we really feel bad for. And I think President Trump, I think his foreign policy, he doesn’t want drug cartels propping this country, Maduro up.
He doesn’t want Russia and China propping them up, and if he put pressure on those countries to stop buying those oil. Maybe he can leave, but at the same time, when we pressure their oil industry, we make the global economy more unstable because prices are higher. We depend on that oil as a stabilizing forest. But you really hurt the Venezuelan people.
And I think, I really do think President Trump feels for those people. He would love to see a stable government. He would like to rebuild the Venezuelan oil industry, make the Venezuelan oil industry great again, and that would be good for us as well, because we continue to rely on that heavy oil right to meet the demands of the world.
CHAKRABARTI: And I also imagine that Chevron would benefit greatly as well.
FLYNN: I’m sure they would, I’ll tell you, they’ve invested a lot of money over the years in that part of the world. But that’s a good thing because when Chevron is helping out Venezuela rebuild their economy, I think that’s a good thing.
But, if you look, the demands around the world, they’ve made, they invest in the world in risky places. And that’s a good thing.
CHAKRABARTI: Phil Flynn, senior market analyst at the Price Futures Group, and with over 40 years of experience in the world of oil and geopolitics. Thank you so much for dealing with those gremlins, Phil, and thank you for joining us.
FLYNN: Thank you. I think I’m gonna exercise my computers around here. I don’t know what I’m gonna do.
CHAKRABARTI: (LAUGHS) Alright. Colonel Cancian, let me turn back to you because Phil mentioned something that reminded me of the fact that just yesterday, the Trump administration released its new national security strategy. And in it, there seems to be a complete repositioning of A, the Trump administration’s belief about how the United States should project its both values and power around the globe.
And B, a refocus on the Western Hemisphere. So do you think that it’s possible that what’s happening with Venezuela is like a dress rehearsal for a future approach that the United States might take, all across Latin America?
CANCIAN: I think what we’re seeing is in part a preview of what we’ll see.
The National Security Strategy just came out last week, as you say. Talks about the Trump corollary to the Monroe Doctrine. And it specifically calls out China and Russia and the need to keep them out of the hemisphere. On the other hand, it’s quite emphatic about noninterference with other countries and not getting involved in overseas wars.
So there’s some tension there, but the refocus on the hemisphere and on Homeland Security permeates the document. It takes up most of the space. Even more so than China, and there’s some discussion about restructuring military deployments and even the U.S. forces to focus on that.
Although we’ll see a lot more detail when the National Defense Strategy, which comes out from the Pentagon, is released any day now.
CHAKRABARTI: Okay. I have one more question for you, Elias, and then again for Colonel Cancian, because my understanding is that when Latin Americans hear the word Monroe Doctrine or the words Monroe Doctrine for the people of Latin America.
That’s a reintroduction of 150 years of American imperialism in the region. How does this concept of a Trump corollary to the Monroe Doctrine land with you?
FERRER: I think there are different perspectives in this. And you can really separate Venezuela from the rest of Latin America here.
I think inside of Venezuela, what you really see is that no one’s really looking at the big picture. And when you have discussions in Caracas, let’s say, or wherever it is inside the country, this is all about Trump helping us get rid of Maduro. But then in the rest of Latin America, actually you do see a lot of people looking at this national security strategy and look at them as aggressive posture of the Trump administration in the region.
And a kind of like backlash and when we see that in Mexico and Brazil and Colombia, where, you know, they’re kind of saying this is not a good idea. Maybe we don’t necessarily recognize Maduro or defend him, but we’re against U.S. imperialism or U.S. interventionism. So I think to me it has been very curious to see like a really stark difference.
Between these two perspectives and I think we probably aren’t really realizing that this strategy is already in motion, and we’ve seen how Trump already pulled out all the stops in the legislative election in Argentina in October, I believe. Really coming out to support Javier Milei and then this last week coming out to support Asfura, this presidential candidate in Honduras.
And I think we are already seeing that strategy play out.
CHAKRABARTI: Yeah. Yeah. Colonel Cancian, last quick question for you. Right now, the administration does not have congressional approval for a military action of this scale in the region. If President Trump goes ahead and tries to attempt some kind of regime change using the military assets right now, wouldn’t that effectively make this any legal war?
CANCIAN: It’s not legal or illegal until a court like the Supreme Court makes that decision. Now, many legal commentators have noted the stretch on the Trump administration’s justifications. For example, the attacks on vessels, potentially an attack on Venezuela. I’d certainly like to see an authorization for such attacks.
But the President says that this comes under his authorities under the Constitution. Article II, and I don’t think he would be deterred.
The first draft of this transcript was created by Descript, an AI transcription tool. An On Point producer then thoroughly reviewed, corrected, and reformatted the transcript before publication. The use of this AI tool creates the capacity to provide these transcripts.
