The American Nationalization of Venezuelan Oil

National Review Online

Wednesday, September 02, 2026

 

A nationalized Venezuelan oil sector isn’t new to the socialist country. What is new, regrettably, is for the United States to be the chief supporter.

 

After months of uncertainty, President Trump announced an unprecedented scheme to effectively seize foreign energy resources. He has arranged for Venezuela’s authoritarian government, led by Nicolás Maduro’s protégé Delcy Rodríguez, to grant a drilling company control of oil fields with proven reserves of around 65 billion barrels. In return, the U.S. military will receive a 35 percent stake in the firm. The federal government would also have the right to purchase a share of the company’s oil at production cost.

 

Any agreement with the current Venezuelan government is suspect. Despite Maduro’s removal, the regime remains despotic and fundamentally illegitimate. It is a shame that Trump thinks it appropriate to leave Rodríguez’s government in place, even further entrenching the interim president through dealmaking.

 

More alarming is the federal government’s taking a financial stake in a Venezuelan oil venture, North American Blue Energy Partners, with close ties to the regime. This move continues the terrible trend of Trump collecting shares in domestic companies by applying leverage, now on an international scale. The Defense Department, of all agencies, should not be acting as a hedge fund unconstrained by law. It has bigger problems to deal with than reviewing corporate board members.

 

The United States had an opportunity this year to gradually open Venezuela’s decrepit oil industry to private investment by improving the country’s legal conditions. That process seems to have taken too long for the president. By backing a foreign producer, Trump is discouraging every American driller from entering Venezuela, as they know they will not be able to compete on equal footing.

 

Trump also promises to undercut domestic producers by refilling the government’s Strategic Petroleum Reserve with below-market-price oil. In truth, that won’t be happening anytime soon. It would take many years to spin up Venezuela’s dilapidated infrastructure to achieve increased production, if ever. The administration says that North American Blue Energy Partners will invest $100 billion in new infrastructure and pay $200 billion in royalties and taxes at “no cost” to American taxpayers. Where will the money come from, then?

 

The president’s worst mistake is thinking that another semi-nationalized oil company is the answer to Venezuela’s production woes. The existing state-owned enterprise, PDVSA, has ruined the nation’s energy sector through pervasive mismanagement and corruption. That is what predictably occurs when firms are insulated from competition, risk, and profit incentives.

 

To the extent it has influence, the administration should model Venezuela’s future energy sector after America’s thriving marketplace rooted in the rule of law, not on failed collectivization and sweetheart deals. Keep the federal government out of the foreign oil business.