January 5, 2026 • 25 mins
Venezuela has long been a country of contradictions, sitting on the world’s largest oil reserves while its economy collapsed around it. Now Donald Trump’s removal of Nicolás Maduro and Washington’s effective control of the country has pushed Venezuela back to the centre of global politics.
At stake is not only a vast energy prize but a bigger shift in how nations compete for resources,, from crude oil to the critical minerals shaping the future of technology.
To unpack what Trump’s move really means, what is happening inside Venezuela’s broken energy sector, and how this connects to a wider global race, Cathy Newman is joined by economics correspondent Helia Ebrahimi and Henry Sanderson, journalist and RUSI associate fellow.
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Episode Transcript
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(00:00):
Trump has a sort of fantasy of resource imperialism rather than
actually being involved in the details and the reality.
There is this vast wealth sitting underneath Venezuela.
Extracting Maduro might have been the easy part because
extracting Venezuelan oil might be a lot harder.
(00:20):
Hello and welcome to the forecast.
Venezuela has long been a country of contradictions,
sitting on the world's largest oil reserves while its economy
collapsed around it. Now Donald Trump's removal of
Nicolas Maduro and Washington's effective control of the country
has pushed Venezuela back to thecentre of global politics.
At stake is not only a vast energy price, but a bigger shift
(00:42):
in how nations compete for resources, from crude oil to the
critical minerals shaping the future of technology.
To unpack what Trump's move really means, what is happening
inside Venezuela's broken energysector, and how all of this
connects to a wider global race,I'm joined by our economics
correspondent Helia Abrahami andjournalist Henry Sanderson,
who's an expert in resources andan associate fellow at RUSI.
(01:06):
Welcome to you both, Henry Sanderson.
First, I mean, it feels really seismic what has happened in
terms of the world order. But what is it really about?
So what I think it's really about is kind of what what Trump
revealed in the the national security strategy, which is
defining Latin America as in theUS backyard as part of their
interests, their region, and sending a message that China
(01:28):
should get out and and Russia should get out.
But it's so. This is a Don Row doctrine.
He's renamed. The Monroe Doctrine hasn't.
That's exactly right. But also with Trump, of course,
it's always personal. I think he was taunted by
Maduro, sort of dancing and singing and provoking him.
So it's also a bit of a bit of that.
We never know with Trump how much a strategy, how much is
(01:49):
sort of his personal animosity. But I think more broadly, it is
about trying to reclaim Latin America because we saw this
extraordinary advance by China right across the continent over
the last decade and investing inin all sorts of resources, which
I can talk more about. Well, we'll talk about resources
and we'll also talk about where else in America's backyard.
We'll come back to that. But Helia, what's it all about?
(02:10):
I mean, as you said at the beginning, there is this vast
wealth sitting underneath Venezuela, the world's largest
oil reserves, 20% of the world'sentire oil reserves is sat in
the Orinoco Basin. Now, extracting Maduro might
have been the easy part because attracting Venezuelan oil might
(02:33):
be a lot harder. Despite having these huge
reserves, oil production in Venezuela has really created.
I mean, it's less than 1,000,000barrels a day and that is 1% if
not a bit less than the whole world production.
So it's it's, it's a challenge. The easy part must have been the
(02:53):
political stuff. What's more difficult is getting
their hands on the. Yeah.
And, and Henry, you know, it was, there were parallels with
other events in history, other US actions, but it was
unprecedented in its nature. Markets don't tend to like that
kind of thing, do they? So how?
What was the immediate reaction?Yeah, you would think markets
would be on edge, but actually oil prices the last time we
(03:14):
tried to fallen today and that'sbecause the global markets awash
in oil. So it's not like a sudden
shortage. And as just mentioned,
Venezuela's production has has completely collapsed.
You know, it's it's three times more decades ago.
So that's the reason the market is not really paying a lot of
attention to that. But I think behind the market
reaction is this other very important seismic shift, which
(03:37):
is the rise of electric vehicles.
And China is a massive oil consumer and 50% of new car
sales in China are EVs and that's going to get to 70% by
the end of the decade. So what actually is the longer
term forecast for oil? And this is so important because
who's going to plow billions into Venezuela when you have an
uncertain outlook? Of course, Trump's bullish on
(03:59):
oil, but but what actually is the the longer term forecast?
One of the most important questions.
Well. So yeah, Helia, pick up on that
point about oil prices in the, you know, now and in the coming.
I mean, oil is around $60.00 andit's coming down.
And next year, as Henry was saying, there's actually a glut
in world oil supply. Why is that?
(04:20):
Well, because you've got OPEC countries like Saudi Arabia
turning on the taps under pressure from Trump.
Remember that in his first aid, Kathy, he said he wants oil
prices, energy prices to come down.
But you've also got other countries, non APEC countries,
neighbors of Venezuela like Guyana, Brazil, Norway, even
(04:40):
bringing on oil supply in that global world, though, I think
it's very important to say that exactly the kind of oil that's
in Venezuela is the kind of oil that American refineries really
know how to use and are desperate for or chronically
short of at the moment. And those refineries are based
(05:03):
in states that Trump is is very popular in.
Yeah. And.
There is one U.S. oil giant in there at the moment.
Isn't there Chevron in Venezuela?
Chevron, but they they operate, I think.
So in the 90s when Hugo Chavez came in, they were naturalized,
appropriated. Yeah.
Thank you very much. But you've got these American
(05:24):
companies like Chevron, like ExxonMobil, who were two
companies at that time. You've got Conoco Phillips that
had lost lots of money. Now Chevron operates there, but
it operates as AJV with the nationalized Venezuelan oil
company. That is a very different kind of
setup to actually owning the oiland owning the production and
(05:45):
being able to start new projects, whereas where the real
profits are. And I come back to the US oil
companies going going in, in just a moment, but just explain
this business that we talked about in the intro earlier
before we move on. Venezuela has the largest oil
reserves in the world and yet production has collapsed.
Just explain what's behind that.I mean, mismanagement, There's
(06:06):
been lots of obviously U.S. companies, European companies
were pushed out of Venezuela. It was nationalized under Hugo
Chavez. A lot of money in the
infrastructure was wasn't put in.
So years and years of underinvestment has led to this
(06:28):
kind of creaking infrastructure where there are oil drills that
are left abandoned, there are spills that go unchecked and
there's been lots of fraud as well, as well as a kind of big
accident. So huge problems so.
Henry, we said, what is this really all about?
Is it an economic act or is it about resources?
Or is other two interlinked? Yeah, I think interlinked, I
(06:50):
think Trump does have this vision and strategy of securing
resources. You know, China has gone around
the world, as I said, under the noses of the US over the last
decade. They're late to the game.
Also the US, they feel like they're they've really got
behind that. China has had the head start in
getting minerals, getting resources and I think.
(07:12):
As it's doing across Africa. As it's as it's done across
Africa. I mean, The thing is that people
around Trump, Trump and Trump, Ithink is starting to believe
that they are really late to thegame and that they need to act
now because they want to milk American dominance.
So, So what? Just explain this term, resource
nationalism. That's doing the rounds, Henry.
(07:33):
Yes, Resource nationalism is basically governments of
resource rich countries trying to get a greater share of the
resources for themselves or moving up the value chain.
In essence saying you can have our resources if you invest in
processing or smelters. And Indonesia is a really
classic example of this. It's basically a few years ago
said we're going to ban exports of nickel unless you build
(07:54):
smelters and other refineries inIndonesia.
And China invested billions of dollars in doing exactly that.
And Indonesia got the jobs, moved up the value chain, is now
producing batteries and electricvehicles.
So that is a, for example, it isfair enough, but the problem is
if you don't have the infrastructure or the workforce
that Indonesia has, you know, you can end up, you know, not
(08:18):
exporting resources and not creating jobs and also leading
to to prices to rise and investors to leave.
But listen, Kathy, there is a panic with American bosses.
There was a tech boss that said to me recently that he thought
that, like many people think, China has already won the AI
(08:38):
robotics race. People are seeing China invest
in their military. They're seeing them invest in
AI. They're seeing them, you know,
be a huge kind of proponent of resource nationalism.
They just. Don't make as much noise as
Donald Trump does about it well.Donald Trump makes quite a bit
of noise, so it's the. Noisiest world leader, but I
(08:58):
mean, where does he sit in this resource?
Nationalism, then. Well, I think he he looks at the
world and you know, he's one of those people who probably looks
at the dictators around the world and thinks why are we not
doing the same? Why are we not expanding and
making the most? I think he's been clear about
why is the US not capitalizing on its economic power in
(09:19):
actually monetizing it. That's what the trade wars were
about last year. And now you're seeing that
enacted in trying to make a stamp stamp forward for
resources. We've been talking, talking
about the markets we've defined this term resource nationalism.
But let's talk about what it means for ordinary Venezuelans,
for Americans and for all of us around the world because I was
really struck talking to an American Venezuelan journalist
(09:43):
in Venezuela over the weekend. And today.
In fact, you know, she can't be absolutely, you know, speak from
the heart about what's happeningthere because there's people are
too fearful, you know, still, and and quite rightly so, you
know, there are armed gangs marauding the streets with with
weapons. So yet you sense from the
Venezuelan diaspora a sense of euphoria and hope.
(10:07):
What does all of this mean in terms of we were talking about
oil prices for American consumers, for Venezuelan
consumers? If the market is stabilized by
Trump, what does it mean for allof us?
Well, I mean, let's talk about Venezuela first start, you know,
where GDP per capita is below $4000.
The opposition leader who actually beat out Donald Trump
(10:30):
for the Nobel Peace Prize has been quite clear that she
welcomes private companies to come and drill and win new
contracts and buy oil assets in order to try and stimulate
economic growth. So there is, there are some
signals that the people within Venezuela are keen on that and
(10:51):
certainly there is a sense that the government hasn't run the
oil asset, hasn't managed to bring some of the wealth that's
in its land to its people. We talked about Chevron already,
the US oil, John, already operating in Venezuela.
But as Helia said in a joint venture, it's sort of not, you
know, it's by no means what we understand as sort of
(11:12):
capitalism. But are there signs from the US
that other firms are heading there?
Trump seemed to suggest that at the weekend.
What are you hearing about that?Yeah, that's we've seen signs
that other companies are interested.
But again, the proof is in the pudding how much they're
actually willing to invest and getting involved because it's
been the graveyard of a lot of investors.
We mentioned the nationalizations earlier, but if
(11:33):
you look at China, they lent over $60 billion to Venezuela
and they got very little oil. The default on, on the money I
think Venezuela still owns owes China 10 to 12 billion.
So they didn't succeed in sorting out the oil industry in
Venezuela as you said, in partnership with the state owned
company. So remains to be seen what model
(11:56):
is actually going to be effective in.
But when you talk about the nationalizations, you know,
expropriations as, as it's beingdescribed, I mean, this is a
highly risky proposition for anycorporate looking to invest,
isn't it? Just spell that out for us in
general terms. Yeah, it is.
I mean, I think as we've mentioned, the infrastructure,
the corruption, all these sort of problems and yes, he's the.
(12:16):
Brain drain. There's been, there's a huge
amount of engineers, scientists who have left Venezuela.
I mean, I think Ukraine is the only other country where more
people have left than Venezuela.So yeah, the brain drain is
real. Huge problems.
And Cathy, you know, you could look at Iraq as a salient
comparison because the the US invaded in 2003.
(12:42):
And again, there was speculationit was really about the oil.
Discuss. But it wasn't until 2008 that
oil production increased, and itwasn't really until 2011 that
you really saw oil supply ramp up massively.
So these things are not, you know, easy.
(13:04):
They're complicated. And you've also got
constitutional problem here. As you said, at the moment, the
Venezuelan constitution forbids foreign ownership.
So you would need a change in the Venezuelan constitution to
allow American companies to allow European companies to
invest. And I think they would need some
(13:25):
reassurance that the political landscape is going to be a bit
more stable. When you've got civilians
marauding the streets with weapons on motorbikes, that
doesn't inspire confidence to most corporates, does it?
And this is a fundamental contradiction at the heart of
Trump's resource strategy, whichis resources is a long term
game. All of these projects are long
term, take decades of investment.
(13:47):
You know, does the US have that kind of continuity of policy
that China has or patience and patience, right.
And and this is the whole problem, like Greenland,
Ukraine, it's going to take years for for projects to be
developed. And can the US support
throughout all those years or because Trump has a sort of
fantasy of resource imperialism rather than actually being
(14:07):
involved in the details and the reality.
And he's also killing a lot of industries that need resources,
such as clean energy industries.And these are the very
industries that China dominates.And that's why China is securing
a lot of Latin America's resources.
So the US has a contradiction. There's a contradiction in his
whole premise that I want oil prices to come down, and yet
(14:28):
drill, baby, drill, those two things don't work within America
itself. Not not to mention the fact that
it doesn't get ourselves fossil fuels.
But the shale industry in the US, you know, has a problem
because if oil prices come down,American shale companies start
to lose money. Well, I want to zoom out, and I
(14:48):
was looking around to see if we used to have a globe in here.
And I wanted to sort of like, you know, address the globe
because it literally effects every corner of the world.
What's happened in the last few days, doesn't it?
So let's look at Russia because the plummeting oil prices that
you were speaking about has an impact potentially on Russia's
war in Ukraine, doesn't it? Because it's funding that from
selling oil. So if oil prices are plummeting,
(15:10):
it could undercut Russia's success in Ukraine, couldn't it?
Yeah, I mean, there's one argument that I think Oleg
Deripaska I saw posted. The Russian oligarch.
That's right, yeah, that US could now and if you add up
Canada, Guyana, Brazil, you know, US has a greater share of
the globe's oil supply with Venezuela.
So yeah, could they could they influence prices and and damage
(15:33):
Russia? I don't know.
Again, as we've, we've talked about on this podcast,
Venezuela's oil production is, is, is small at the moment, you
know, million barrels a day or, or something around that.
So we need, as we said, it takesyears to kind of boost the
industry. So it remains to be seen, you
know, what kind of control the US could have.
But no doubt the US is a fossil fuel power, is becoming a
(15:55):
greater fossil fuel oil power. But is that the right game to be
in? That's my question.
You know, and China's the opposite side.
It's a clean energy superpower and you've got to look at what
investors are are thinking and shares of clean energy companies
have actually done well over Trump over the last 12.
Months, yeah, but is that about to change?
If you've got this potential glut of oil and cheaper oil, is
(16:18):
that going to? For example, here we hear a lot
of pressure on the government inthe UK about their net zero
drive and their push for renewables.
Are the opposition going to start saying we should take
advantage of this glut of cheap oil?
Yes, I, I think outside China could well change and we've seen
backlash, we've seen a lot of questioning of net 0 targets
(16:38):
unpopularity. So yes, I think it could.
But China is, again is the big consumer of all resources and
all commodities and they have a firm strategy for electric
vehicles, for moving off oil. They don't want to rely on oil
imports, especially not in the current environment.
So I think that is pretty certain and that's going to be
(16:58):
the direction China takes, whichwill impact all commodities.
Look, cheaper oil is good for consumers.
It's good for consumers in the US, which Donald Trump is very
keen on. It's very important for him.
And the whole affordability issue in the US, it's good for
consumers in the UK. The the question is, you know,
(17:19):
what does it mean in terms of the move to green energy?
Does it disincentivize our move away from fossil fuels?
But also the irony of the fact that it actually hurts US
producers. And I think that is quite
interesting. You were talking about Russia.
Lower oil price hurts Iran, it hurts Russia.
(17:41):
Taking away Venezuelan oil won'tdamage China, but Venezuelan 80%
of the Venezuelan and oil now goes to China so although.
Trump has made noises about, youknow, they'll get all the oil
They're they're currently buyingfrom Venezuela.
And we saw these what they called dark tankers, you know,
ghost. Tankers.
Ghost tankers. Exactly.
Ghost tankers. Dark mode sailing out of.
(18:03):
I think that that point is interesting because the bigger
issue here is, is Trump sort of dividing the world up into
spheres of influence? Are we going to see a big grand
bargain where it's like you get out of Latin America, but you
can have the Pacific or you, youknow, Southeast Asia, Russia
can, you know, And that's the bigger question in my mind.
It's total. Imperialist vibes, isn't it?
Yes, it's a throwback to dividing up up the world.
(18:26):
Because you heard Marco Rubio onthe weekend saying again, we're
not going to allow our adversaries to create a base in
the Western Hemisphere. I mean, people like Chevron have
said for years, this hasn't happened.
Actually, China hasn't created abase in Venezuela.
They haven't really capitalized on the fact that the US
operators have have disappeared.But obviously it helps the
(18:50):
narrative. Maybe you don't need to have a
complete invasion of American companies in order to control
the tap. It makes Chinese teapot
refineries have to pay more for oil.
That helps US strategic intentions and it puts pressure
on other countries. But it's a new colonialism,
(19:10):
isn't it? Yeah, But I think the biggest
issue in my mind is these Latin American countries, the the
reason why China was so successful in Latin.
These countries are new, essentially neutral.
A country like Chile, China is their biggest export market.
They don't want to upset China and they're not picking sides.
And this is the issue is, are these countries going to sign up
(19:32):
to this new, you know, Monroe Doctrine, you know, are they
willing to alienate and push back against China?
I just don't think so because China is the source of trade but
there's a non. Buyer like, I mean, think of
their agriculture at the moment.Think of soybeans.
We've talked about on this show,soybeans and American farmers,
Brazil, Argentina, huge soybean kind of growers and they all
(19:56):
sell it to China. So the China's position in Latin
America, despite all of Trump's,you know, cries to the contrary,
is very powerful. Well, let's talk about we've
talked about colonialism and imperialism.
So let's look at where this goesnext because Trump has been
clear today that Greenland is potentially in his sights.
(20:17):
He said it before, but he said it with new clarity today.
He's also talked about Cuba, even Mexico, which is bizarre
because Mexico and the US are jointly hosting the World Cup.
So how does that work? And how much of this is serious?
What's your answer to How serious is he about Greenland,
for example? Well, I think we've been told to
take him out of his word, right?And we should actually believe
(20:39):
what he says. And as we can see from from the
action that was initiated, I think, yeah, we should be, we
should be concerned. And we saw Denmark, I think put
out a strong, strong statement. So, so, so we should be
concerned, I mean, I think. Enough now, they said, didn't
they? It was in sort of Trump esque
terms, which is obviously the way that people, world leaders
think they have to talk to Trumpthese days.
(21:00):
Yeah. But I think you know Greenland,
the resource angle is spurious right there.
Yes, there are resources, but again, I don't like this the
reserves term that we've talked about, you know, yes, may maybe
resources, but at what price to get out, what kind of CapEx,
who's who's going to spend the money?
Well, is that is that tricky to to?
It's really tricky to get to theresource beneath Greenland.
Yeah, quality of the raw success.
(21:20):
You know, there's lots of problems.
Not that you know you would seize Greenland and tomorrow be
a big producer of rare earths. Shipping lanes as well with
Greenland as. Well, yes, it's obviously a
strategic angles, but a big, big, big question is if he goes
to Greenland. About colonialism.
Yeah, what would Europe do? This could be a test of
Europe's, you know. Well, Europe has been.
(21:41):
Europe's metal. Europe's metal has been limp, to
say the least, since the attack happened, hasn't it?
So where in the spheres of influence?
We've talked about China, we've talked about America, we've
mentioned Russia. That's how it's sort of carved
up, isn't it? Do you want to add anyone else
into that? I, I think Europe is in a tricky
situation because it, it, you know, it's a big market for, for
(22:04):
China. Does it push back against,
against China risk, risk upsetting China.
It's now the US, we saw from thenational security strategy, the
US really down on Europe saying Europe is, you know, facing huge
cultural problems. So US is also is becoming
antagonistic to Europe. So where does, where does Europe
(22:25):
go? I I think the only answer is
greater European unity, right and and greater resolve, you
know, within Europe. Let's end with asking the
question that I've been asking myself all weekend and asking
every guest I get on the program.
What next? What is your prediction in terms
of what Donald Trump does next in Venezuela, but beyond
(22:46):
Venezuela too? And how does this just build a
picture of this new era of resource nationalism, resort
colonialism, new imperialism, whatever you want to call it,
your terminology? What are what are we looking at
next? Yeah.
So I mean, Venezuela seems incredibly uncertain from what I
read. Again, I'm not obviously there,
but what actually is the US going to do to to to run the
(23:09):
place? I mean, he initially said we're
going to run it. And then I think the State
Department sort of cooled that down.
What are they actually gonna do?And the similar, you mentioned
Iraq earlier, but, you know, it went into Iraq, but then there
was no plan right for for Day 2 or actually running the country.
And it was chaos. And we could still see boots on
the ground in Venezuela. That has not been ruled.
Out hasn't ruled that out. So how What are they actually
gonna do? Are they gonna run the country?
(23:31):
Because, you know, they've had this very successful mission?
That's the kind of thing Trump likes, He said.
It was like watching TV. But to your point that the you
know the concentration span isn't there for the long term,
these are. That's the problem sugar hit and
that's that's my answer to your question about the whole
strategy is what follow the money, right.
Yes, you've got what he wants Greenland and all these other
(23:53):
places. Is the money from from U.S.
companies actually going to follow and actually invest in
these? Countries this weekend, Who's an
energy analyst said said that they think that it would cost
$110 billion in order to get Venezuelan production to where
it was just 10 years ago. That's huge, The money for
(24:15):
rebuilding Gaza, rebuilding Ukraine.
The US has got fingers in all. These pies exactly for U.S.
companies to actually spend thatmoney when the climate is
uncertain where the political landscapes are in certain not
just in Venezuela by the way, but in the US because what
happens when Trump in three years time is no longer in
office and. What would you call this new era
(24:36):
we're in? Then?
Ioffer you various terminologies.
What would you go? For I think it's a scramble for
resources against the backdrop of a tested energy transition,
which on the one hand, China is leading and, and the US is is
fighting against. But just to the earlier point, I
think the difference, the US in many ways is trying to do a
China, but the difference is thecompanies still operate As for
(24:57):
profit corporates. Chinese companies can be told to
go in and make losses and and invest and.
Suck it. Up.
But U.S. companies just can't dothat.
So how will the corporate side of America follow Trump's
policies? As I say, follow the money.
Are they actually going to back his broader strategy?
Helia Henry, thank you both verymuch.
That is it for this episode of The FORECAST.
(25:19):
Until next time, goodbye.
Trump has a sort of fantasy of resource imperialism rather than
actually being involved in the details and the reality.
There is this vast wealth sitting underneath Venezuela.
Extracting Maduro might have been the easy part because
extracting Venezuelan oil might be a lot harder.
(00:20):
Hello and welcome to the forecast.
Venezuela has long been a country of contradictions,
sitting on the world's largest oil reserves while its economy
collapsed around it. Now Donald Trump's removal of
Nicolas Maduro and Washington's effective control of the country
has pushed Venezuela back to thecentre of global politics.
At stake is not only a vast energy price, but a bigger shift
(00:42):
in how nations compete for resources, from crude oil to the
critical minerals shaping the future of technology.
To unpack what Trump's move really means, what is happening
inside Venezuela's broken energysector, and how all of this
connects to a wider global race,I'm joined by our economics
correspondent Helia Abrahami andjournalist Henry Sanderson,
who's an expert in resources andan associate fellow at RUSI.
(01:06):
Welcome to you both, Henry Sanderson.
First, I mean, it feels really seismic what has happened in
terms of the world order. But what is it really about?
So what I think it's really about is kind of what what Trump
revealed in the the national security strategy, which is
defining Latin America as in theUS backyard as part of their
interests, their region, and sending a message that China
(01:28):
should get out and and Russia should get out.
But it's so. This is a Don Row doctrine.
He's renamed. The Monroe Doctrine hasn't.
That's exactly right. But also with Trump, of course,
it's always personal. I think he was taunted by
Maduro, sort of dancing and singing and provoking him.
So it's also a bit of a bit of that.
We never know with Trump how much a strategy, how much is
(01:49):
sort of his personal animosity. But I think more broadly, it is
about trying to reclaim Latin America because we saw this
extraordinary advance by China right across the continent over
the last decade and investing inin all sorts of resources, which
I can talk more about. Well, we'll talk about resources
and we'll also talk about where else in America's backyard.
We'll come back to that. But Helia, what's it all about?
(02:10):
I mean, as you said at the beginning, there is this vast
wealth sitting underneath Venezuela, the world's largest
oil reserves, 20% of the world'sentire oil reserves is sat in
the Orinoco Basin. Now, extracting Maduro might
have been the easy part because attracting Venezuelan oil might
(02:33):
be a lot harder. Despite having these huge
reserves, oil production in Venezuela has really created.
I mean, it's less than 1,000,000barrels a day and that is 1% if
not a bit less than the whole world production.
So it's it's, it's a challenge. The easy part must have been the
(02:53):
political stuff. What's more difficult is getting
their hands on the. Yeah.
And, and Henry, you know, it was, there were parallels with
other events in history, other US actions, but it was
unprecedented in its nature. Markets don't tend to like that
kind of thing, do they? So how?
What was the immediate reaction?Yeah, you would think markets
would be on edge, but actually oil prices the last time we
(03:14):
tried to fallen today and that'sbecause the global markets awash
in oil. So it's not like a sudden
shortage. And as just mentioned,
Venezuela's production has has completely collapsed.
You know, it's it's three times more decades ago.
So that's the reason the market is not really paying a lot of
attention to that. But I think behind the market
reaction is this other very important seismic shift, which
(03:37):
is the rise of electric vehicles.
And China is a massive oil consumer and 50% of new car
sales in China are EVs and that's going to get to 70% by
the end of the decade. So what actually is the longer
term forecast for oil? And this is so important because
who's going to plow billions into Venezuela when you have an
uncertain outlook? Of course, Trump's bullish on
(03:59):
oil, but but what actually is the the longer term forecast?
One of the most important questions.
Well. So yeah, Helia, pick up on that
point about oil prices in the, you know, now and in the coming.
I mean, oil is around $60.00 andit's coming down.
And next year, as Henry was saying, there's actually a glut
in world oil supply. Why is that?
(04:20):
Well, because you've got OPEC countries like Saudi Arabia
turning on the taps under pressure from Trump.
Remember that in his first aid, Kathy, he said he wants oil
prices, energy prices to come down.
But you've also got other countries, non APEC countries,
neighbors of Venezuela like Guyana, Brazil, Norway, even
(04:40):
bringing on oil supply in that global world, though, I think
it's very important to say that exactly the kind of oil that's
in Venezuela is the kind of oil that American refineries really
know how to use and are desperate for or chronically
short of at the moment. And those refineries are based
(05:03):
in states that Trump is is very popular in.
Yeah. And.
There is one U.S. oil giant in there at the moment.
Isn't there Chevron in Venezuela?
Chevron, but they they operate, I think.
So in the 90s when Hugo Chavez came in, they were naturalized,
appropriated. Yeah.
Thank you very much. But you've got these American
(05:24):
companies like Chevron, like ExxonMobil, who were two
companies at that time. You've got Conoco Phillips that
had lost lots of money. Now Chevron operates there, but
it operates as AJV with the nationalized Venezuelan oil
company. That is a very different kind of
setup to actually owning the oiland owning the production and
(05:45):
being able to start new projects, whereas where the real
profits are. And I come back to the US oil
companies going going in, in just a moment, but just explain
this business that we talked about in the intro earlier
before we move on. Venezuela has the largest oil
reserves in the world and yet production has collapsed.
Just explain what's behind that.I mean, mismanagement, There's
(06:06):
been lots of obviously U.S. companies, European companies
were pushed out of Venezuela. It was nationalized under Hugo
Chavez. A lot of money in the
infrastructure was wasn't put in.
So years and years of underinvestment has led to this
(06:28):
kind of creaking infrastructure where there are oil drills that
are left abandoned, there are spills that go unchecked and
there's been lots of fraud as well, as well as a kind of big
accident. So huge problems so.
Henry, we said, what is this really all about?
Is it an economic act or is it about resources?
Or is other two interlinked? Yeah, I think interlinked, I
(06:50):
think Trump does have this vision and strategy of securing
resources. You know, China has gone around
the world, as I said, under the noses of the US over the last
decade. They're late to the game.
Also the US, they feel like they're they've really got
behind that. China has had the head start in
getting minerals, getting resources and I think.
(07:12):
As it's doing across Africa. As it's as it's done across
Africa. I mean, The thing is that people
around Trump, Trump and Trump, Ithink is starting to believe
that they are really late to thegame and that they need to act
now because they want to milk American dominance.
So, So what? Just explain this term, resource
nationalism. That's doing the rounds, Henry.
(07:33):
Yes, Resource nationalism is basically governments of
resource rich countries trying to get a greater share of the
resources for themselves or moving up the value chain.
In essence saying you can have our resources if you invest in
processing or smelters. And Indonesia is a really
classic example of this. It's basically a few years ago
said we're going to ban exports of nickel unless you build
(07:54):
smelters and other refineries inIndonesia.
And China invested billions of dollars in doing exactly that.
And Indonesia got the jobs, moved up the value chain, is now
producing batteries and electricvehicles.
So that is a, for example, it isfair enough, but the problem is
if you don't have the infrastructure or the workforce
that Indonesia has, you know, you can end up, you know, not
(08:18):
exporting resources and not creating jobs and also leading
to to prices to rise and investors to leave.
But listen, Kathy, there is a panic with American bosses.
There was a tech boss that said to me recently that he thought
that, like many people think, China has already won the AI
(08:38):
robotics race. People are seeing China invest
in their military. They're seeing them invest in
AI. They're seeing them, you know,
be a huge kind of proponent of resource nationalism.
They just. Don't make as much noise as
Donald Trump does about it well.Donald Trump makes quite a bit
of noise, so it's the. Noisiest world leader, but I
(08:58):
mean, where does he sit in this resource?
Nationalism, then. Well, I think he he looks at the
world and you know, he's one of those people who probably looks
at the dictators around the world and thinks why are we not
doing the same? Why are we not expanding and
making the most? I think he's been clear about
why is the US not capitalizing on its economic power in
(09:19):
actually monetizing it. That's what the trade wars were
about last year. And now you're seeing that
enacted in trying to make a stamp stamp forward for
resources. We've been talking, talking
about the markets we've defined this term resource nationalism.
But let's talk about what it means for ordinary Venezuelans,
for Americans and for all of us around the world because I was
really struck talking to an American Venezuelan journalist
(09:43):
in Venezuela over the weekend. And today.
In fact, you know, she can't be absolutely, you know, speak from
the heart about what's happeningthere because there's people are
too fearful, you know, still, and and quite rightly so, you
know, there are armed gangs marauding the streets with with
weapons. So yet you sense from the
Venezuelan diaspora a sense of euphoria and hope.
(10:07):
What does all of this mean in terms of we were talking about
oil prices for American consumers, for Venezuelan
consumers? If the market is stabilized by
Trump, what does it mean for allof us?
Well, I mean, let's talk about Venezuela first start, you know,
where GDP per capita is below $4000.
The opposition leader who actually beat out Donald Trump
(10:30):
for the Nobel Peace Prize has been quite clear that she
welcomes private companies to come and drill and win new
contracts and buy oil assets in order to try and stimulate
economic growth. So there is, there are some
signals that the people within Venezuela are keen on that and
(10:51):
certainly there is a sense that the government hasn't run the
oil asset, hasn't managed to bring some of the wealth that's
in its land to its people. We talked about Chevron already,
the US oil, John, already operating in Venezuela.
But as Helia said in a joint venture, it's sort of not, you
know, it's by no means what we understand as sort of
(11:12):
capitalism. But are there signs from the US
that other firms are heading there?
Trump seemed to suggest that at the weekend.
What are you hearing about that?Yeah, that's we've seen signs
that other companies are interested.
But again, the proof is in the pudding how much they're
actually willing to invest and getting involved because it's
been the graveyard of a lot of investors.
We mentioned the nationalizations earlier, but if
(11:33):
you look at China, they lent over $60 billion to Venezuela
and they got very little oil. The default on, on the money I
think Venezuela still owns owes China 10 to 12 billion.
So they didn't succeed in sorting out the oil industry in
Venezuela as you said, in partnership with the state owned
company. So remains to be seen what model
(11:56):
is actually going to be effective in.
But when you talk about the nationalizations, you know,
expropriations as, as it's beingdescribed, I mean, this is a
highly risky proposition for anycorporate looking to invest,
isn't it? Just spell that out for us in
general terms. Yeah, it is.
I mean, I think as we've mentioned, the infrastructure,
the corruption, all these sort of problems and yes, he's the.
(12:16):
Brain drain. There's been, there's a huge
amount of engineers, scientists who have left Venezuela.
I mean, I think Ukraine is the only other country where more
people have left than Venezuela.So yeah, the brain drain is
real. Huge problems.
And Cathy, you know, you could look at Iraq as a salient
comparison because the the US invaded in 2003.
(12:42):
And again, there was speculationit was really about the oil.
Discuss. But it wasn't until 2008 that
oil production increased, and itwasn't really until 2011 that
you really saw oil supply ramp up massively.
So these things are not, you know, easy.
(13:04):
They're complicated. And you've also got
constitutional problem here. As you said, at the moment, the
Venezuelan constitution forbids foreign ownership.
So you would need a change in the Venezuelan constitution to
allow American companies to allow European companies to
invest. And I think they would need some
(13:25):
reassurance that the political landscape is going to be a bit
more stable. When you've got civilians
marauding the streets with weapons on motorbikes, that
doesn't inspire confidence to most corporates, does it?
And this is a fundamental contradiction at the heart of
Trump's resource strategy, whichis resources is a long term
game. All of these projects are long
term, take decades of investment.
(13:47):
You know, does the US have that kind of continuity of policy
that China has or patience and patience, right.
And and this is the whole problem, like Greenland,
Ukraine, it's going to take years for for projects to be
developed. And can the US support
throughout all those years or because Trump has a sort of
fantasy of resource imperialism rather than actually being
(14:07):
involved in the details and the reality.
And he's also killing a lot of industries that need resources,
such as clean energy industries.And these are the very
industries that China dominates.And that's why China is securing
a lot of Latin America's resources.
So the US has a contradiction. There's a contradiction in his
whole premise that I want oil prices to come down, and yet
(14:28):
drill, baby, drill, those two things don't work within America
itself. Not not to mention the fact that
it doesn't get ourselves fossil fuels.
But the shale industry in the US, you know, has a problem
because if oil prices come down,American shale companies start
to lose money. Well, I want to zoom out, and I
(14:48):
was looking around to see if we used to have a globe in here.
And I wanted to sort of like, you know, address the globe
because it literally effects every corner of the world.
What's happened in the last few days, doesn't it?
So let's look at Russia because the plummeting oil prices that
you were speaking about has an impact potentially on Russia's
war in Ukraine, doesn't it? Because it's funding that from
selling oil. So if oil prices are plummeting,
(15:10):
it could undercut Russia's success in Ukraine, couldn't it?
Yeah, I mean, there's one argument that I think Oleg
Deripaska I saw posted. The Russian oligarch.
That's right, yeah, that US could now and if you add up
Canada, Guyana, Brazil, you know, US has a greater share of
the globe's oil supply with Venezuela.
So yeah, could they could they influence prices and and damage
(15:33):
Russia? I don't know.
Again, as we've, we've talked about on this podcast,
Venezuela's oil production is, is, is small at the moment, you
know, million barrels a day or, or something around that.
So we need, as we said, it takesyears to kind of boost the
industry. So it remains to be seen, you
know, what kind of control the US could have.
But no doubt the US is a fossil fuel power, is becoming a
(15:55):
greater fossil fuel oil power. But is that the right game to be
in? That's my question.
You know, and China's the opposite side.
It's a clean energy superpower and you've got to look at what
investors are are thinking and shares of clean energy companies
have actually done well over Trump over the last 12.
Months, yeah, but is that about to change?
If you've got this potential glut of oil and cheaper oil, is
(16:18):
that going to? For example, here we hear a lot
of pressure on the government inthe UK about their net zero
drive and their push for renewables.
Are the opposition going to start saying we should take
advantage of this glut of cheap oil?
Yes, I, I think outside China could well change and we've seen
backlash, we've seen a lot of questioning of net 0 targets
(16:38):
unpopularity. So yes, I think it could.
But China is, again is the big consumer of all resources and
all commodities and they have a firm strategy for electric
vehicles, for moving off oil. They don't want to rely on oil
imports, especially not in the current environment.
So I think that is pretty certain and that's going to be
(16:58):
the direction China takes, whichwill impact all commodities.
Look, cheaper oil is good for consumers.
It's good for consumers in the US, which Donald Trump is very
keen on. It's very important for him.
And the whole affordability issue in the US, it's good for
consumers in the UK. The the question is, you know,
(17:19):
what does it mean in terms of the move to green energy?
Does it disincentivize our move away from fossil fuels?
But also the irony of the fact that it actually hurts US
producers. And I think that is quite
interesting. You were talking about Russia.
Lower oil price hurts Iran, it hurts Russia.
(17:41):
Taking away Venezuelan oil won'tdamage China, but Venezuelan 80%
of the Venezuelan and oil now goes to China so although.
Trump has made noises about, youknow, they'll get all the oil
They're they're currently buyingfrom Venezuela.
And we saw these what they called dark tankers, you know,
ghost. Tankers.
Ghost tankers. Exactly.
Ghost tankers. Dark mode sailing out of.
(18:03):
I think that that point is interesting because the bigger
issue here is, is Trump sort of dividing the world up into
spheres of influence? Are we going to see a big grand
bargain where it's like you get out of Latin America, but you
can have the Pacific or you, youknow, Southeast Asia, Russia
can, you know, And that's the bigger question in my mind.
It's total. Imperialist vibes, isn't it?
Yes, it's a throwback to dividing up up the world.
(18:26):
Because you heard Marco Rubio onthe weekend saying again, we're
not going to allow our adversaries to create a base in
the Western Hemisphere. I mean, people like Chevron have
said for years, this hasn't happened.
Actually, China hasn't created abase in Venezuela.
They haven't really capitalized on the fact that the US
operators have have disappeared.But obviously it helps the
(18:50):
narrative. Maybe you don't need to have a
complete invasion of American companies in order to control
the tap. It makes Chinese teapot
refineries have to pay more for oil.
That helps US strategic intentions and it puts pressure
on other countries. But it's a new colonialism,
(19:10):
isn't it? Yeah, But I think the biggest
issue in my mind is these Latin American countries, the the
reason why China was so successful in Latin.
These countries are new, essentially neutral.
A country like Chile, China is their biggest export market.
They don't want to upset China and they're not picking sides.
And this is the issue is, are these countries going to sign up
(19:32):
to this new, you know, Monroe Doctrine, you know, are they
willing to alienate and push back against China?
I just don't think so because China is the source of trade but
there's a non. Buyer like, I mean, think of
their agriculture at the moment.Think of soybeans.
We've talked about on this show,soybeans and American farmers,
Brazil, Argentina, huge soybean kind of growers and they all
(19:56):
sell it to China. So the China's position in Latin
America, despite all of Trump's,you know, cries to the contrary,
is very powerful. Well, let's talk about we've
talked about colonialism and imperialism.
So let's look at where this goesnext because Trump has been
clear today that Greenland is potentially in his sights.
(20:17):
He said it before, but he said it with new clarity today.
He's also talked about Cuba, even Mexico, which is bizarre
because Mexico and the US are jointly hosting the World Cup.
So how does that work? And how much of this is serious?
What's your answer to How serious is he about Greenland,
for example? Well, I think we've been told to
take him out of his word, right?And we should actually believe
(20:39):
what he says. And as we can see from from the
action that was initiated, I think, yeah, we should be, we
should be concerned. And we saw Denmark, I think put
out a strong, strong statement. So, so, so we should be
concerned, I mean, I think. Enough now, they said, didn't
they? It was in sort of Trump esque
terms, which is obviously the way that people, world leaders
think they have to talk to Trumpthese days.
(21:00):
Yeah. But I think you know Greenland,
the resource angle is spurious right there.
Yes, there are resources, but again, I don't like this the
reserves term that we've talked about, you know, yes, may maybe
resources, but at what price to get out, what kind of CapEx,
who's who's going to spend the money?
Well, is that is that tricky to to?
It's really tricky to get to theresource beneath Greenland.
Yeah, quality of the raw success.
(21:20):
You know, there's lots of problems.
Not that you know you would seize Greenland and tomorrow be
a big producer of rare earths. Shipping lanes as well with
Greenland as. Well, yes, it's obviously a
strategic angles, but a big, big, big question is if he goes
to Greenland. About colonialism.
Yeah, what would Europe do? This could be a test of
Europe's, you know. Well, Europe has been.
(21:41):
Europe's metal. Europe's metal has been limp, to
say the least, since the attack happened, hasn't it?
So where in the spheres of influence?
We've talked about China, we've talked about America, we've
mentioned Russia. That's how it's sort of carved
up, isn't it? Do you want to add anyone else
into that? I, I think Europe is in a tricky
situation because it, it, you know, it's a big market for, for
(22:04):
China. Does it push back against,
against China risk, risk upsetting China.
It's now the US, we saw from thenational security strategy, the
US really down on Europe saying Europe is, you know, facing huge
cultural problems. So US is also is becoming
antagonistic to Europe. So where does, where does Europe
(22:25):
go? I I think the only answer is
greater European unity, right and and greater resolve, you
know, within Europe. Let's end with asking the
question that I've been asking myself all weekend and asking
every guest I get on the program.
What next? What is your prediction in terms
of what Donald Trump does next in Venezuela, but beyond
(22:46):
Venezuela too? And how does this just build a
picture of this new era of resource nationalism, resort
colonialism, new imperialism, whatever you want to call it,
your terminology? What are what are we looking at
next? Yeah.
So I mean, Venezuela seems incredibly uncertain from what I
read. Again, I'm not obviously there,
but what actually is the US going to do to to to run the
(23:09):
place? I mean, he initially said we're
going to run it. And then I think the State
Department sort of cooled that down.
What are they actually gonna do?And the similar, you mentioned
Iraq earlier, but, you know, it went into Iraq, but then there
was no plan right for for Day 2 or actually running the country.
And it was chaos. And we could still see boots on
the ground in Venezuela. That has not been ruled.
Out hasn't ruled that out. So how What are they actually
gonna do? Are they gonna run the country?
(23:31):
Because, you know, they've had this very successful mission?
That's the kind of thing Trump likes, He said.
It was like watching TV. But to your point that the you
know the concentration span isn't there for the long term,
these are. That's the problem sugar hit and
that's that's my answer to your question about the whole
strategy is what follow the money, right.
Yes, you've got what he wants Greenland and all these other
(23:53):
places. Is the money from from U.S.
companies actually going to follow and actually invest in
these? Countries this weekend, Who's an
energy analyst said said that they think that it would cost
$110 billion in order to get Venezuelan production to where
it was just 10 years ago. That's huge, The money for
(24:15):
rebuilding Gaza, rebuilding Ukraine.
The US has got fingers in all. These pies exactly for U.S.
companies to actually spend thatmoney when the climate is
uncertain where the political landscapes are in certain not
just in Venezuela by the way, but in the US because what
happens when Trump in three years time is no longer in
office and. What would you call this new era
(24:36):
we're in? Then?
Ioffer you various terminologies.
What would you go? For I think it's a scramble for
resources against the backdrop of a tested energy transition,
which on the one hand, China is leading and, and the US is is
fighting against. But just to the earlier point, I
think the difference, the US in many ways is trying to do a
China, but the difference is thecompanies still operate As for
(24:57):
profit corporates. Chinese companies can be told to
go in and make losses and and invest and.
Suck it. Up.
But U.S. companies just can't dothat.
So how will the corporate side of America follow Trump's
policies? As I say, follow the money.
Are they actually going to back his broader strategy?
Helia Henry, thank you both verymuch.
That is it for this episode of The FORECAST.
(25:19):
Until next time, goodbye.
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