The escalating tensions between Washington and Caracas have renewed scrutiny of what some analysts believe may be the true objective behind the Trump administration's aggressive posture: access to Venezuela's extraordinary natural resource wealth, including the world's largest proven oil reserves and substantial deposits of strategic minerals critical to advanced technologies.

In a last-ditch attempt to cling to power, President Nicolás Maduro had offered the United States preferential access to Venezuelan crude and minerals during months of negotiations to forestall military intervention, according to a recent New York Times report.

The proposal involved opening oil and gold projects to American companies with preferential contracts, and redirecting crude oil exports from China to the United States.

The discussions with Venezuelan officials, overseen by Special Presidential Envoy Richard Grenell, ultimately collapsed as President Donald Trump chose military escalation over diplomacy, embracing the hawkish line of Secretary of State Marco Rubio.

The negotiations took place against the ongoing backdrop of a huge US military deployment in the eastern Caribbean, officially targeting what the administration describes as "narco-terrorism".

Trump has branded Maduro as the head of a "narco-terror cartel", though the very existence of the Cartel de Los Soles is widely disputed, and US intelligence data notes Venezuela is not a primary transit route for cocaine and does not produce or export fentanyl, the synthetic opioid responsible for most American overdose deaths.

The hydrocarbon prize

Venezuela holds approximately 303bn barrels of proven oil reserves, representing 17.5% of the global total, according to industry data. The South American nation also possesses the seventh-largest natural gas reserves globally at 221 trillion cubic feet (6.26 trillion cubic metres)—equivalent to nearly 80% of Latin America and the Caribbean's combined reserves.

Yet the country’s oil production has plummeted from its position as one of the world's leading producers in 2008 to just eighteenth globally by 2024, according to research published by EBSCO. Daily output had fallen to 761,000 barrels in 2023, suggesting enormous potential for recovery under different management and with solid investment.

The so-called Orinoco Belt, which runs east-west across the middle of the country and encompasses the Falcón, Apure, and Oriental basins, contains extra-heavy crude, a dense and viscous oil requiring specialised extraction and refining methods. Some of the refineries along the US Gulf Coast are specifically designed to handle these heavy crude varieties, making that region a natural destination for Orinoco oil exports.

State oil company PDVSA, created when Venezuela nationalised its oil industry in 1975-1976 and currently under direct control of the Maduro regime, accounts for approximately 50% of government revenue and 80% of the nation's export earnings. However, poor cash flow stemming from corruption, sanctions and mismanagement has hampered investment in petroleum infrastructure, consequently curbing production capacity.

The Maracaibo basin supplies slightly less than half of Venezuela's oil production, but the increasing depth of remaining reserves requires heavy investment to maintain current capacity. Oil drillers have been forced to reinject natural gas into reservoirs to increase pressure in deeper wells, according to EBSCO research.

The country has managed to sustain shipments through sanctioned and shadow channels, with Chevron and other firms operating under US exemptions continuing production amid the US military buildup off the country’s coast.

Venezuelan output has surpassed 1mn barrels per day, roughly 100,000 more than at the end of 2024, and Vice President and Minister of Hydrocarbons Delcy Rodríguez boasted a 16% increase in activity this year.

Most exports are directed to China, often sold at discounts of 10% to 20% to bypass US restrictions, analysts say. Despite long-standing US pressure, Venezuela’s oil sector remains resilient, with exports and market access adapting to geopolitical and sanction-related constraints.

Energy analysts argue that the Trump administration’s goal is to maintain a US foothold in case of political change, enabling Western oil firms to help quickly revive Venezuelan output and potentially rival Saudi Arabia by the 2030s, according to FT reports.

For now, exports to China remain steady, though experts warn they could be disrupted if Washington moves to seize tankers under fresh sanctions or trafficking claims.

Strategic minerals and industrial metals

Venezuela's mineral wealth extends well beyond hydrocarbons, encompassing resources increasingly vital to global supply chains for advanced technologies, energy transition and manufacturing.

According to EBSCO, the country possesses one of the world's largest bauxite supplies, the ore essential for aluminium production. These deposits are located in the vast Guiana Highlands region, where the bauxite formed through laterisation of tertiary sediments laid horizontally on precambrian rocks. The ore consists of aluminium hydroxide minerals plus various mixtures of alumina-silicates, iron oxide, silica, titanium and trace impurities.

In 2008, six companies operated 14 primary aluminium smelters in Venezuela, placing the country 15th globally in aluminium production and accounting for 2.9% of the world's bauxite and 1.4% of aluminium output. The smelting operations required enormous amounts of electricity, which the country's hydroelectric dams produced relatively cheaply. Venezuela consistently ranked among the top 25 exporters of aluminium, with principal importers including the United States, Mexico, Japan, the Netherlands and Colombia.

Iron ore deposits in the Guiana Highlands have enabled steel production at Ciudad Guayana, the country's industrial heart. Following the Second World War, the enormous iron ore deposits on the northern rim of the plateau attracted US Steel and Bethlehem Steel, which operated large open-pit mines. US Steel's main mine covered the entire summit of Cerro Bolívar mountain.

Iron-ore products—including iron, iron pellets and ingots and flat-rolled sheets—rank second behind petroleum in the country's export value.

Venezuela also holds significant deposits of gold, copper, nickel, coltan and cassiterite. Additional commodities include sulphur (6% of global production), feldspar (2%), silica sand (1%) and lesser amounts of coal, lead, zinc, titanium, diamonds and uranium. Most of these commodities originate from mining activities in the Andes Mountains or Guiana Highlands, though extraction remains primarily at surface level.

Hydroelectric capacity

Venezuela's natural resource portfolio includes substantial hydroelectric generation capacity, ranking ninth globally in per-capita hydroelectricity production among the 149 nations with dams. Hydroelectric energy supplies 77.6% of the country's electricity needs, according to the CIA World Factbook, compared with 5.6% in the United States.

The nation's hydroelectricity comes from dams built on rivers of the Guiana Highlands, particularly the Caroní River, which has four operational dams. The Guri Dam, located just above the Caroní's mouth and operational since 1978, has the third-largest generating capacity among hydroelectric facilities worldwide, behind only China's Three Gorges Dam and the Itaipu Dam on the Brazil-Paraguay border.

This hydroelectric capacity allows Venezuela to export surplus electricity to neighbouring Colombia and Brazil, whilst enabling the production of iron, steel and aluminium for global markets using relatively low-cost power.

Economic collapse and foreign interests

The military build-up occurs as opposition leader María Corina Machado, recently awarded a Nobel Peace Prize “for her struggle to achieve a just and peaceful transition from dictatorship to democracy," presents an alternative economic vision pandering to Washington and American business interests. Machado, who remains in hiding within Venezuela following the disputed July 2024 presidential election, has claimed the country offers a $1.7 trillion opportunity over the next 15 years, contingent upon the current regime's removal and implementation of her reform programme.

Despite its exceptional natural resource endowment, Venezuela is widely considered a failed state. The country's economy, heavily reliant on hydrocarbons for decades, imploded following the untimely passing of former president Hugo Chavez – a controversial but more charismatic and competent leader than Maduro – in 2013 and the subsequent 2014 slump in oil prices from $100 per barrel to $30 by 2016.

The Council on Foreign Relations reported in 2022 that 77% of Venezuela's 28mn citizens lived in extreme poverty, with nearly 8mn having emigrated since 2014.

Corruption, mismanagement and the collapse of private sector businesses have all contributed to the inability to restore oil production levels. Foreign investment, sorely needed to capitalise on Venezuela's resources, has dropped to near zero due to increased risk perceptions.

Sascha Lohmann, a political scientist at the German Institute for International and Security Affairs, suggested to DW that whilst fighting drug trafficking provides the official rationale, the Trump administration likely harbours broader objectives. "Resources certainly play the most important role, both fossil fuels and other raw materials needed to keep accelerating the technology race, particularly where China is concerned," he said.

What’s next?

Speaking to CBS's "60 Minutes" programme on November 2, Trump sent once again mixed signals about American intentions. "I doubt it. I don't think so," he said when asked if the United States were going to war against Venezuela.

But pressed on whether the US was planning any strikes on land, Trump did not rule it out.

Meanwhile the USS Gerald R. Ford, the world's most expensive warship at a value of $13bn, is currently bound for the Caribbean with dozens of fighter jets and helicopters aboard, joining seven other US vessels already in the region. The deployment represents an unprecedented mobilisation of American naval power in the area.

More than 15 US strikes on small boats in the Caribbean and Pacific have killed at least 65 people in recent months, with the latest taking place on November 1. The White House has yet to make public any evidence that its targets were smuggling narcotics or posed a threat to the United States, prompting criticism from US lawmakers, regional governments and UN experts who denounced the attacks as extrajudicial killings.

The Pentagon has also been upgrading a long-abandoned Cold War naval base in Puerto Rico, approximately 500 miles from Venezuela, and expanding facilities at civilian airports across US Caribbean territories, according to a Reuters investigation based on satellite imagery and photographs.

Construction activity at the former Roosevelt Roads naval base, shuttered in 2004, and improvements at airports in Puerto Rico and St Croix offer yet another indication that the US is gearing up for sustained military operations.

“All of these things are, I think, designed to scare the pants off the Maduro regime and the generals around him, with the hope that it will create fissures,” Christopher Hernandez-Roy, a senior fellow at the Center for Strategic and International Studies (CSIS), told Reuters.

For his part, Maduro has accused Washington of fabricating a "new eternal war" and using drug trafficking as a pretext for "imposing regime change" in Caracas to seize Venezuelan oil. According to the Washington Post, the embattled leader has reached out to Russian President Vladimir Putin for help and has mobilised coastal defences, claiming possession of more than 5,000 Russian-manufactured surface-to-air missile systems.

However, the Kremlin, bogged down in its war in Ukraine, would have limited capacity or inclination to provide significant assistance should Washington launch comprehensive operations inside Venezuela.

Additionally, analysts believe Trump’s renewed focus on the Southern Hemisphere may prove beneficial to Putin because it diverts attention away from Ukraine. China’s support appears even more unlikely despite Maduro's flaunting of Chinese solidarity. Whilst Beijing has extended tens of billions in development loans to Caracas over the past two decades, Chinese foreign direct investment turned negative in 2019, and commercial banks have virtually abandoned Venezuela. 

“I think the objective of president [Trump] and the administration is that somebody close to Maduro convinces him either to go into exile, they decide to extradite him to the United States, or they remove him from power by other means,” James Story, former US ambassador to Venezuela, told the FT’s “Swamp Notes” podcast.

The crisis remains on a knife-edge as top-tier American military assets continue massing in the Caribbean. Whether the standoff will be resolved through some kind of military intervention, negotiations leading to an interim government without the deeply unpopular autocrat, or the internal disintegration of the Chavista regime remains a trillion-dollar question. But when asked on November 2 if Maduro's days as president were numbered, Trump's answer was bluntly unequivocal: "I would say yeah. I think so, yeah.”