“Stolen property”: The explosive legal basis behind Trump’s Venezuela threats – Is it about justice or sheer resource control?

Trump's military escalation against Venezuela: Between economic interests and questionable international law

The geopolitical situation in Latin America has reached a new, threatening dimension. While rhetorical attacks between Washington and Caracas have been standard fare for years, the current escalation under Donald Trump marks a turning point: It is no longer just about sanctions or diplomatic isolation, but about the direct exploitation of Venezuelan oil reserves – the largest in the world.

Trump legitimizes his actions, which extend to threats of military blockades, with a narrative of "restoring justice." At the heart of this narrative are the massive waves of nationalizations under the late President Hugo Chávez in 2007. At that time, US giants like ExxonMobil and ConocoPhillips were expelled from the country without the "prompt and appropriate" compensation demanded by the West. What Trump now labels "theft of American property" is, however, under international law a highly complex web of arbitration rulings, billions of dollars in claims, and national sovereignty rights.

While international arbitration tribunals (such as the ICC and ICSID) have long since awarded billions in compensation, which Venezuela has so far only partially paid, the US administration now appears to be abandoning the path of legal redress. The current escalation suggests that the compensation issue is merely serving as a legal pretext for a far larger goal: the violent restructuring of the global energy market and the elimination of Chinese and Russian influence from the Western Hemisphere. This puts not only the stability of the region at stake, but also the integrity of international investment law.

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A conflict that has long since become a threat to the world order.

In recent weeks, the Trump administration has launched a geopolitical offensive against Venezuela that is unprecedented in its directness and escalation. The US president has not only designated the Venezuelan government a terrorist organization, but has also ordered a comprehensive naval blockade against all sanctioned oil tankers sailing to or from Venezuela. At the same time, Washington has built up a massive military presence off the coast of the South American country, including the world's largest aircraft carrier, the USS Gerald R. Ford, several fighter jets, and nearly a dozen warships. These actions are not spontaneous, but rather part of a systematically constructed threat that has been building for months and is now culminating in open military aggression.

The official justification for this escalation is the fight against drug trafficking and terrorism. However, the reality behind it is far more complex and reveals the deeper economic, geopolitical, and ideological forces driving American interventionism. This is not primarily an anti-drug operation, but rather an attempt at power projection that focuses on resources and ignores international norms.

The nationalizations of the past

The central narrative Trump uses to justify his blockade relates to Hugo Chávez's nationalization of oil fields in the early 2000s. Trump claims that Venezuela stole American property and must return it.

In 2007, under Chávez, Venezuela nationalized the oil fields of the American corporation Exxon Mobil and the Canadian company ConocoPhillips. This led to compensation claims before international arbitration tribunals. The International Chamber of Commerce (ICC) awarded Exxon $908 million in compensation. Venezuela initially paid only $255 million, citing outstanding debts owed by the corporation. In 2014, the arbitration panel agreed on a sum of $1.6 billion for Venezuela. Simultaneously, the Canadian mining company Crystallex received an arbitration award of $1.4 billion.

The facade of drug control: A transparent justification

The Trump administration claims its military actions are aimed at combating drug trafficking and terrorism. In reality, the US military has conducted over two dozen attacks on suspected drug boats, killing at least 90 people. These operations raise fundamental questions about their legitimacy. An aircraft carrier is an instrument for enforcing state power across vast geographical areas, not for chasing boats in coastal waters. The warships positioned off the coast of Venezuela are completely overqualified for the purported drug enforcement mission.

External observers, including security experts from the Council on Foreign Relations, have publicly stated that neither drug control nor direct oil control is the true objective of the United States, but rather the immediate desire to overthrow the Maduro regime. This is not speculative, but based on an analysis of military deployments that are disproportionately large for such objectives.

The lack of evidence for the alleged drug shipments is also revealing. To date, the US has presented no documented evidence to support its claim that the attacked boats were actually carrying drugs. This aligns with the pattern of extrajudicial killings documented by human rights organizations.

The questionable legality under international law of the blockade and airspace closure

The declaration of a naval blockade and closed airspace by the United States outside of a formal state of war constitutes a fundamental violation of international law. While customary international law exists regarding naval blockades, these only apply in the context of an armed international conflict between belligerent parties. A unilateral embargo that is not sanctioned by the international community violates the fundamental principles of the Charter of the United Nations.

UN Secretary-General António Guterres has already declared that the US attacks in the Caribbean are not in accordance with international law. This is a clear condemnation from the highest leadership position of the United Nations. France, a close ally of the US, has also described the airstrikes as illegal under international law. This shows that even within the Western alliance, the legal basis for these operations is being questioned.

Trump has declared that Venezuelan airspace is closed and that the US military will respond to any intruding air traffic. This means that the US is effectively cutting off a sovereign state from its natural resources and free trade, while simultaneously challenging its air sovereignty. This constitutes a form of de facto occupation without a formal military invasion.

The economic impact and the oil market paradox

Despite the massive escalation, the impact on global oil prices has so far been surprisingly moderate. WTI crude rose by 1.3 percent to $55.99 per barrel, while Brent climbed by 1.5 percent. This is an important observation, as it suggests that markets are not anticipating a comprehensive supply disruption that would result from a genuine blockade.

The reason lies in the fundamental market situation: the global oil market is suffering from a massive oversupply. The International Energy Agency forecasts an increase of approximately 3 million barrels per day on the world market in 2025, while demand will only rise by about 0.8 to 0.9 million barrels per day. For 2026, an additional 2.4 million barrels per day of oversupply is expected. This means that even a partial or complete blockade of Venezuela's oil exports would not significantly reduce supply, as other producers could fill the gap.

Venezuela currently exports approximately 921,000 barrels per day, with about 80 percent going to China, roughly 150,000 per day to the Americas via Chevron, and the remainder to allies like Cuba. In the context of the global market, this represents only about two to three percent of the global oil market. While a disruption of these exports would be catastrophic for Venezuela, it would have only a muted effect on global oil prices.

However, the effects of the de facto blockade are already evident in price differentials. Venezuela's main oil grade, Merey, is currently trading at a discount of up to $21 to the Brent benchmark price. This reflects the increased transportation risks and the uncertainty created by the American military presence. Chinese refineries, which primarily purchase Venezuelan oil, are demanding substantial price reductions to compensate for the heightened risk of tanker seizures.

Venezuela's energy dependency and the shifting of geopolitical axes

The Venezuelan economy is over 80 percent dependent on oil exports. This makes the country vulnerable to any supply-side shock or external political measures such as the American blockade. Venezuela's historical oil production peaked at approximately 3,453,000 barrels per day in 1997. Today, production stands at around 1,132,000 barrels per day, less than a third of its peak.

This decline is not primarily a consequence of geopolitical gridlock, but rather the result of mismanagement, a lack of investment in infrastructure, and the nationalization of the oil industry under Hugo Chávez. The government did not reinvest profits but instead spent them on social programs and replaced the oil companies' management with political loyalists. This led to a continuous decline in production over more than two decades.

A key aspect of the current situation is the shift in energy supply away from the US and toward Russia and China. Russia has become the primary supplier of naphtha, the necessary additive for diluting Venezuela's heavy crude oil from the Orinoco Belt. In July 2025, Russia was shipping approximately 70,000 barrels of naphtha per day to Venezuela after the US licenses for Chevron, which had been intermittent, were not renewed. However, Chevron received a new license in October 2025 and is once again shipping naphtha to Venezuela. This illustrates the complex interplay between sanctions, licensing, and pragmatic market dynamics.

China has made substantial investments in Venezuela, with an estimated $100 billion in total investments in Latin America. The Chinese company China Concord Resources Corporation is developing two Venezuelan oil fields with a projected production of 60,000 barrels per day by 2026, supported by an investment of approximately $1 billion. These Chinese investments are strategic; they not only secure energy supplies but also position China as an economic superpower in Latin America, a region historically considered America's backyard.

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The geopolitical context: China, Russia and the multipolar world order

What is happening in Venezuela should not be viewed in isolation, but rather as part of a larger geopolitical shift toward a multipolar world order. Despite their sometimes rival interests, China and Russia both have a fundamental interest in a stable, strategically positioned Venezuela. For Russia, Venezuela is a regional ally that maintains its geopolitical presence alongside the United States. For China, Venezuela is a critical energy source and a symbol of its expanding economic power in America's backyard.

Maduro has requested military support from both countries, including missiles, GPS jammers, drones, and radar systems. While the immediate military response is likely to be limited because Russia is tied down by the war in Ukraine and China has its own problems with the massive US tariffs, the symbolic message remains clear: The US can no longer automatically assume that interventions in its hemisphere will proceed unhindered.

China's official warning was unequivocal: Should the US launch a military attack on Venezuela, China would consider providing military support similar to that given to Russia in Ukraine. This is an unprecedented escalation by China, demonstrating how much the situation has taken on global dimensions.

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The strategic raw materials and the true reasons for the intervention

The Orinoco Belt in Venezuela contains an estimated 513 billion barrels of crude oil, possibly the world's largest known reserves. However, this oil is in the form of heavy fuel oil, which is technically complex and expensive to extract. Two tons of oil sands are required to produce one barrel of refined crude oil. This often makes extraction unprofitable under normal market conditions.

Nevertheless, this remains one of the world's most valuable sources of raw materials. In the context of a world yearning for energy security and destined to remain dependent on fossil fuels in the long term, these resources are incredibly important strategically. Trump's demand for the return of these resources should not be understood as reparations for nationalizations, but rather as an attempt to control resources.

This follows a historical pattern of American interventionism in Latin America. The Banana Wars of the early 20th century, the 1954 intervention in Guatemala, the Cuban Missile Crisis, and countless other episodes demonstrate that the US has been willing to use its military power over raw materials or land claims. Trump follows this pattern, but utilizes the modern technologies and justifications of the 21st century.

The Hypocaosis of the International Legal Order

What makes the current situation particularly ironic is the Trump administration's completely selective application of international law concepts. The US, which regularly portrays itself as a defender of the international order, flagrantly violates this order when its interests are at stake. UN Secretary-General Guterres directly criticized the measures, demonstrating that even the formal international community questions their legality.

This has long-term consequences for the global order. If the US can impunity and impose a naval blockade on a sovereign state and close its airspace without being sanctioned by the international community, then the principle of the sovereign equality of states is eroded. This creates a dangerous precedent that could encourage other major powers to take similar measures against their adversaries.

The internal contradictions and the real situation in Venezuela

Nicolás Maduro is undoubtedly an authoritarian leader whose government has committed massive human rights violations and whose economic policies have led the country into a dead end. The political opposition is suppressed, the elections were rigged, and the Venezuelan population suffers from supply crises and extreme poverty. These are objective realities that should not be denied.

However, external military intervention as a tool for resolving these internal problems is problematic for several reasons. First, regime change through external intervention is not automatically a guarantee of improvement. The examples of Iraq, Libya, and Afghanistan demonstrate quite the opposite. Second, an intervention against Venezuela would not be an isolated event but would have repercussions for the entire region and the global order. Third, Venezuela's population and economy are already so devastated that further military escalation would likely cause further humanitarian catastrophes.

The paradox of power and the limits of hegemony

What is becoming clear in the current situation is a fundamental paradox of American power: The US has the military capacity to dominate Venezuela, but not the political capacity to create a stable state afterward, nor the global legitimacy to do so with impunity. This is the core of the change in the international order.

Trump claims America must become great again and cannot do as it pleases if it adheres to international norms. This is a direct attack on the liberal international order established after 1945. But this order, though proclaimed by Western countries, was never truly universal. Great powers like the US have regularly violated it when it served their interests. Trump simply makes this explicit and without the usual hypocrisy.

The economic damage to Venezuela and the region

For Venezuela itself, the situation is catastrophic. The country, once the richest nation in Latin America and possessing the world's largest oil reserves, has collapsed. A major naval blockade would further reduce exports, the government would have even less foreign currency income, and the already severely impacted Venezuelan people would suffer even more. A cyberattack on PDVSA this week has already crippled its administrative systems and temporarily halted oil deliveries, demonstrating just how fragile its already underinvested infrastructure is.

Regime change through external intervention would not automatically lead to improvements, even under Edmundo González Urrutia, who is recognized by the US and the EU as the legitimate president. Venezuela's economic structure, its dependence on oil exports, its infrastructure deficits, and the legacy of decades of mismanagement and lack of investment would persist. A new president would have fewer resources at his disposal, not more, if the country were subjected to external military subjugation.

The international dimension and the question of global order

What is at stake extends beyond Venezuela. The Trump administration is testing how far it can go without an effective response from the international community. If a complete naval and airspace blockade against a sovereign state can be enforced, other major powers will employ similar tactics against their rivals. Russia might be tempted to close the Bosporus Strait, or China might block the Strait of Malacca. This would fragment the global trading system and cause economic damage for all.

The UN Security Council could theoretically intervene, but this is blocked because the US is a permanent member and would veto any action. This demonstrates the fundamental paralysis of UN structures when a superpower breaks its rules.

The renewal of an old imperialism in the digital age

What is happening in Venezuela is not a new form of geopolitics, but a renewal of very old imperialist patterns using modern means and justifications. Trump is not taking a stand against an authoritarian state on principle, but is trying to secure control over raw materials, gain geopolitical leverage with China and Russia, and reinforce American hegemony.

The claim of combating drug trafficking and terrorism is a thin veneer for the true goal of regime change. The refusal to pay compensation for nationalizations of the 2000s is legally unfounded, as these have already been settled through arbitration. The naval blockade and the airspace closure are illegal under international law and endanger the international order, as they set a precedent for similar measures by other powers.

At the same time, it is clear that the blockade will be economically devastating for Venezuela, but marginal for global oil markets. The global oil market is in a state of oversupply, and Venezuelan exports account for only a few percent of the global market. The price effects will therefore remain subdued.

The deeper implication is that we are witnessing a turning point in the international order. The US is prepared to disregard traditional international norms to maintain its hegemony. China and Russia are signaling their support for Venezuela. This is creating a clearer bipolarity, or even multipolarity, in the global order, where regional blocs and power relations are becoming more important than universal international rules.

For Europe and other countries interested in a rules-based international order, this is a critical moment. France's refusal to endorse the agreement and the UN Secretary-General's criticism are positive signs, but without concrete consequences, they remain mere words. As long as the international community fails to impose effective costs for violations of international law, such interventions will increase.

Konrad Wolfenstein

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