Crude Expectations

It can be difficult to measure the tectonic shifts in U.S. foreign and military policy these past weeks. Starting with the aggression against Venezuela, and quickly moving to threats against Greenland, Mexico, Cuba, Panama, Canada and Iran, we can safely declare this is the end of the post-World War II order. President Donald Trump’s aberrant form of imperialism now stands to shape the world as radically, and much more dangerously, than the Fall of the Wall. 

In this brave new world, U.S. officials no longer even attempt to craft and sell convincing pretexts. First, the problem with Venezuela was drugs, then our concern was oil. There was no hypocritical nod to rebuilding democracy, or much concern with Nicolás Maduro’s fraudulent reelection. Trump left the Maduro regime in power, minus Maduro, and the Chavista ruling caste that includes the seven to 10,000 generals and admirals he appointed. Vice President Delcy Rodríguez, described in the U.S. media as a “hard line socialist” has apparently been playing footsie with Trump under the table for months, with many Venezuelans convinced she pacted with Trump to keep her new office as president.

“There’s barely a trace of socialism anywhere in Venezuela,” former New York Times Venezuela correspondent William Neuman told me. “The hyperinflation of a few years ago was choked down by the most austere of conservative neoliberal policies and [Rodriguez is] on the same page as Trump, despite her fiery leftist rhetoric. She’s ready to give Trump whatever he wants. And what the people mostly want is to be able to eat.”

This weekend, Secretary of State Marco Rubio, whom Trump now suggests should be the new president of Cuba, awkwardly dodged a barrage of questions as to when new elections would be held in Venezuela. The Trump administration has little taste to empower the opposition, a chaotic assemblage that offers dubious guarantees of order and stability. Better to keep the peace and not repeat the catastrophic decision of the George W. Bush administration to purge Saddam Hussein’s Baathist cronies from the Iraqi state and military, leaving nobody left to govern. 

Jorge Castañeda, Mexico’s former foreign minister, is among those who think the current situation can’t last more than six months. He tells Truthdig that post-Maduro Venezuela is governed by a “hybrid” economic policy in which Washington has final say, but Rodríguez is allowed to continue running the state machinery. “I don’t think this is tenable in the long run that the U.S. is going to run Venezuela via WhatsApp from Washington.”

Washington’s boasts about the future of Venezuela’s oil industry may be as dubious as its claims to “running the country,” he says. 

Twenty-five years ago, some argued the U.S. invasion of Afghanistan was all about the Unocal oil pipeline. It was never built; at least not through Afghanistan. The invasion of Iraq was also described as a war for oil. But while some small-scale drilling took place under the U.S. occupation, it was mostly halted in 2009 by heavy taxes imposed by the Shiite regime. It wasn’t until this past year that Iraq made generous offers to big American oil companies to set up shop. Those companies have gingerly inserted a few toes in renewing operations, but industry experts say nothing of significance will take place until after the Iraqi November elections, which pro-Iranian forces might dominate and scuttle plans for American drilling.

Venezuela’s massive reserves have remained mostly untapped as the Maduro government let the infrastructure rust away. Estimates range between $100 billion and $200 billion to get things back in order, a bill that Trump says will not be footed by Big Oil. As it is today, Venezuelan oil accounts for a dribbling 1% of global output, and industry analysts estimate it would take $60 billion and six years to get up to 2%. Hence, the icy reception Trump got from more than a dozen American oil execs during a sales job that landed like a pitch for a Cabo timeshare. Not a single company pledged to invest; it’s just not worth the risk.

To save face, Trump might have to come up with tens of billions of taxpayer dollars to subsidize and minimize the gamble in the event that new drilling contracts are eventually signed. But as for now, it’s not clear who would sign them. 

The question of greater U.S. influence in Latin America is also uncertain, at best. The Caribbean Basin where Venezuela sits is already largely pro-American. The one exception, Cuba, has already started replacing Venezuelan oil shipments with Mexican crude. China will be affected, but its dominant role as the major trading partner and investor in the Southern Cone and Brazil is unchanged. King Don Kong is a little late in thinking he’s going to be the big cheese “down there,” to quote Ronald Reagan.