The Venezuela Oil Deal Is Just the Start

A chevron Gas sign against a dark night

The recent series of U.S.-Venezuela oil deals is not quite as significant as it was made out to be.

The main highlights are Chevron’s investment and the U.S. putting its stamp of approval on NABEP. While NABEP lacks much of what it takes to expand production, U.S. backing gives the company credibility to attract outside investment.

This is just the beginning of a long road to recovery, but it’s better than nothing.

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Transcript

Hey everybody. Peter Zeihan here, coming to you from Colorado. Today we’re going to look at something that happened while I was away at Yosemite. The oil deals between the United States and Venezuela. There’s been a lot of hyperbolic conversation about them. The reality is much more muted. 

We’ve got three things. First of all, Chevron, which is an American company that never left Venezuela, has announced a series of investments with the aim of increasing output by 300,000 barrels over the next five years. This is probably the upper level of what Chevron can do. Not that Chevron’s not capable, but that the crude in Venezuela, as a rule, is very difficult to work with. You basically have three regions, one in the East that has some more conventional crude, one in the west around Maracaibo that’s heavy crude. And then down in the south in a place called the Orinoco Belt, where it’s super heavy, crude and is actually a physical solid at room temperature, and it has to be heated up and mixed with other liquids in order to be able to put into a pipeline. Anyway, Chevron has operations throughout the area. They’re basically taking the fields that they already have, putting in some more money and trying to increase recovery rates. So really not doing anything new. So 300,000, that’s about all you’re going to get. 

The second one is Americas Hunt Oil, which is taking over two small fields in the east of the country…that are small. And if they do really well, you know, maybe they’ll get 100,000 barrels out of that over ten years. Again, not very interesting. Remember, this is a country that at the height was producing 4 million barrels a day back in the 1980s and 1990s. And then Chavez and Maduro, it just…..until it fell into under a million barrels a day, where it is now. 

The third one. The third deal is the one that’s getting really interesting with a company called NABEP and NABEP is the successor that has been renamed a few times, for a firm that started operating back in the 20 tens that at the time was called Petrozamora, run by a guy by the name of Alejandro Betancourt López. This guy is somebody who is tightly affiliated with the Russian government. And when the United States put sanctions on the Chavez-Maduro regime, the Russians basically came in to do what they could. But Russian technology sucks in the type of fields that Venezuela has. So Betancourt was able to basically bring in a few people from outside the Russian sphere and actually operate a few fields. But then when you get to 2020, if you remember back to 2020, you know, Covid year, it was kind of rough in Venezuela as well because they had elections and it looked for a hot minute like this guy from the outside was going to take over. He never did. But Betancourt sided with him, and it came to light that he had also been embezzling a lot of money from the Venezuelan state oil company, and so he got kicked out of the country. And Petrozamora (fell apart) until it was only producing like 100,000, maybe even 50,000 barrels a day. Well, fast forward to calendar year 2023. And a woman by the name of Rodriguez, who is now the acting president of Venezuela, brought him back in because the oil sector in Venezuela had just tanked in the intervening three years and started bringing the company back. I think it produces about 200,000 barrels a day right now. Anyway, this new deal with the United States is with the successor to Petrozamora, with Betancourt personally. They’ve renamed the company NABEP, and they’re basically taking all of the Russian concessions and all of the Chinese concessions and giving them to this new company. Now, this new company does not have the staffing, much less the expertise and the volume and the drilling rigs that are necessary to operate all these fields. You probably need about 90 rigs to really make it all work. They’ve got two. In addition, the United States has taken a theoretical not not actual theoretical share in NABEP and has theoretically the ability to assign people to their board. And theoretically, if the U.S. Defense Department specifically wants to take the crude that NABEP produces, it gets rights of first refusal, the first 20% they get at a huge discount, basically production cost and the other 80% they can get at market costs. But all of this is in theory. Unless and until someone else comes in and provides the funding and the staffing and the equipment, NABEP really isn’t going to go anywhere. The point of this deal, however, is for the U.S. government to put a stamp of approval on this one firm so that others who are willing to take more risk can come in, invest in the firm, and then maybe turn it into something that can turn Venezuela’s oil fortunes around. It’s a necessary first step. I don’t begrudge the U.S. administration or the acting Venezuelan government for that. But there’s no money here. There’s no skill transfer here. There’s no equipment coming in at yet. The Chevron deal really is at the moment, the only one that matters at all. And that’s 300,000 barrels over five years. Not a big deal. 

But if if if if if if all of those things happen, then you are talking about the very, very beginning of a renaissance in Venezuela. You still have to change the laws, because right now foreign ownership is an issue. You still have to change the reparations route, because right now it’s not clear how the money gets to the investors. But at the very minimum, we now have at least one entity operating in Venezuela that actually has the right to develop fields, that isn’t the state. That is a step in the right direction. But let’s not get too crazy. Let’s not get ahead of ourselves.

Is Venezuela Ready to Move On?

A person walking draped in a Venezuelan flag against a desaturated background

Venezuela has been dragged through the mud thanks to Chávez and Maduro, but it might be seeing its first genuinely positive development in decades. Former VP and now President Delcy Rodríguez has announced a sweeping amnesty covering all crimes since ’99.

That’s three decades of corruption, repression, and institutional collapse that is getting wiped clean. This offers Venezuela an alternative ending; rather than ending up as a failed state due to anarchy or civil war, it can head down a brighter path. But simply granting amnesty won’t cut it; they’ll need an open truth-and-reconciliation process similar to what South Africa did.

This development could give Venezuela a real fresh start. With Rodríguez already shutting down political prisons, I’m cautiously optimistic and hope that she continues to surprise me.

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Transcript

Hey everybody, Peter Zeihan here coming to you from Colorado. And today we’re trying to talk a little bit about Venezuela because we’ve had some interesting developments. The sitting president, woman by the name of Desi Rodriguez, has announced an asylum for everyone, going back to 1999, 1999 is when Hugo Chavez, became president and started the country down on its. 

The civilizational spiral gutted the energy company. Everyone started to basically lose the educational attainments they had had. Venezuela used to be the third most advanced country in the Western Hemisphere, after the United States and Canada. And under Chavez, you drove into the ground. And then his successor, Nicolas Maduro, who used to be Chavez’s bus driver, proved to be quite a thug. 

Stole even more from the place than Chavez did and continue to drive it into the ground. And his VP is Delsey Rodriguez. now that the U.S. has removed Nicolas Maduro from the stage, Rodriguez is now in charge and she’s offered this amnesty. So basically, any crimes were committed by anyone from 1999 until present, wiped clean. 

This is probably I don’t want to play this because there’s a lot that still needs to happen. This is probably the best news. It has come out of Venezuela in 20 years. 30 years, almost 30 years. Okay, so when you have an authoritarian government, rather it’s a dictatorship like the Maduro Chavez system or a colonial rule or communists or whatever it happens to be. 

Usually when the system ends and ends one of two ways. Number one, a key personality dies and there is no clear successor. And the place just kind of dissolves into anarchy. Or number two, other groups form and you get a more ossified opposition, and the two start fighting, and eventually that fighting becomes very literal, and you eventually get a civil war. 

And neither of these options are great, because in the first one, the institutions were destroyed by the authoritarian. And so there’s nothing to carry on after the authoritarian is gone. And civil war, I would like most people to understand is generally not good for much of anything. This is potentially a third way that has been tried by very, very few places, and even fewer successfully. 

But I think the best example I can give you of how a general amnesty works can work is South Africa. Everybody knew that the apartheid government was a little off. And when the apartheid government fell at the end of the Cold War, there was something very similar, an amnesty program where all of the whites who everyone knew were torturing the blacks were given blanket pardons. 

And all of the blacks, especially the more militant groups who had basically been killing people for decades, in their resistance against the apartheid government were also given pardons. And what we have to remember is that is step one. starting with a blank slate. Very important, deciding to bury the past and move on. Very important. 

But even if everyone is in agreement that this is the right path, the step two is very important. And the way the South Africans did that was was something called a truth and reconciliation committee, where basically everybody got together and shared with everyone else what they had done. So the Zulu nationalists talked about their their murder brigades, and the white nationalists talked about their torture techniques. 

And it was raw and it was awful. It was jarring. But by being honest with one another, they set the stage for a pluralistic society. And while South Africa has many, many, many, many, many problems, democracy is not one of them. If Venezuela is going to turn the page, something like that is going to happen. And if something like that happens, it is going to be awful. 

There are political prisons that are in the process now have been shut down as part of this asylum program. And kudos to Marco Rubio, who is US Secretary of state, who has basically pushed Rodriguez in this direction. But it’s not just enough to wipe the slate. You also have to have an open, honest conversation among yourselves about why it happened, how it happened, what happened, who did what. 

And with that, you can then potentially move forward with a new constitution, a new political system, and have a true fresh start. That is now what’s in front of Venezuela. But I gotta say, when this all started, I looked at Dulce Rodriguez, who was one of the most famous thugs and one of the most famous looters of the country, and I did not expect this step. 

So for one rare moment, I’m actually a little bit optimistic about how this could go. Don’t fuck it up.

Venezuela’s End: Peter Goes Squirrel Killin’

squirrel laying on a log

Following the capture of Venezuelan President Nicolás Maduro, I’ve had a ton of theories and ideas flood in. So, it looks like it’s time for a good old-fashioned squirrel killin’.

Some of the theories (aka squirrels) that we’re going to be killing today are: Venezuela was a credible drone/military threat to the US, Russia was waiting for an excuse (like this) to attack the US, China might use this as justification, and that this was just a warm-up for Iran.

As you can see, no shortage of squirrels here.

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Transcript

Hey everybody Peter Zeihan here coming from Colorado. It’s above 50 degrees, so I think we would go for a hike. Anyway, a lot of folks have written in with a lot of questions about what’s gone on in the aftermath of Venezuela. For those of you who have been in a coma over the last weekend, Delta forces went into Caracas and grabbed the president, Nicolas Maduro, and brought him to New York to face arraignment, where he is facing, narco terrorism and conspiracy charges that date back over a decade. 

We’ll never hear from him again. Anyway, lots of people had lots of questions about what this means. So the point of this video is to do what I call squirrel killing. So coming up with these arguments that people think might be have something to them, show why they really don’t what the real issue is. So let’s start with the big one. 

And that’s the idea that part of the reason why the US, went after Maduro is because of the fear that, Venezuela could be used as a military base to attack the United States, particularly with drones. Short version is. No, first of all, there are very few drone systems on the planet that have the range that is necessary to cross the Caribbean. 

You’re talking over a thousand miles here and hit the United States. Of the ones that could, most are American. But the Russians don’t have models like that. The Chinese don’t have models like that. Ironically, the Ukrainians now do. Pretty sure they’re not going to want to attack the United States. That just leaves Iran, which has the showerheads, which the newer ones do have probably barely the range that’s necessary. 

What they lack is decision making capability and real guidance. 

And so when you program a showerhead, you have to tell it what routes to follow and where to drop its payload. And in the open ocean, there’s nothing to follow. So technologically, there really isn’t a weapon system that is set for this task. And even if there was, the first city that you’re going to hit, the only one of size that you’re going to hit is Miami. 

You know, we all have our opinions about Miami, but I don’t think any of us like, oh, Miami. That’s militarily critical. Yeah. No. So, you know, blowing up some hotels on South Beach is not the sort of thing that the United States is going to be intensely concerned about. What it would do, however, is trigger an adverse reaction in the American political system, which would lead to massive American counter strikes on whoever was behind it. 

Because clearly, the Venezuelan government, the Venezuelan economy can’t make a biplane, much less a drone. So not that one. What’s next? 

The Russians have been itching to have an excuse to attack the United States. And this is it. No, the Russians are locked down in a war that has been moving incredibly slowly. At the pace they’re going. They’re not going to conquer Ukraine, this century. And they need to really finish it up before they run out of troops in just a few years. In addition, the Ukrainians recently have been on counter attacks and have reclaimed a number of cities, including, you ask, and there just isn’t any Russian spare capacity to do anything else anywhere. They’ve even pulled a lot of troops out of not just the Far East, but off of the NATO border in order to focus them on Ukraine. And if if they were stupid enough to think that they could do otherwise, let’s say they stage some weapons in Cuba, for example. 

Number one, the Cubans would not go for it after Venezuela. And the Cubans are pretty sure that they’re next, and they’re desperate to find a way to avoid an American attack. Staging Russian weapons all 1963, much less launching them, would guarantee the end of their regime because the Soviet Union is no longer exists, and post-Soviet Russia, in its current form, really can’t do a thing to protect any of its allies, whether that is Iran or Venezuela or Cuba. So no. And if if that were to happen, I can guarantee you that the president not just Donald J. Trump, any American president, would then make ending Vladimir Putin at the very, very top of a very short list of things to do once Cuba was neutralized. And if there’s one thing Vladimir Putin values above all else, it’s his own skin. And every time in the past he has been personally threatened, he has backed down, especially when it comes to relations with the United States. So No. 

One more thing on the Russians. You know, it says doesn’t react well to threats, especially if the threats actually make us bleed a little bit. So if you think back to, say, Sputnik or the Cuban missile Crisis, the US massively overreacted and it caused the Soviet Union a series not just geopolitical defeats, but global humiliation in their inability to counter what the United States did. 

And Putin doesn’t just know this. Putin has lived this, so he will never do something that is intended as a direct strike on the United States. You always work through third parties. He will always work to turn us against one another. That’s one of the reasons why the Russians intervened in the elections. That’s one of the reasons why they both support Trump and oppose him. Russian propaganda is very active on all sides of all ideological debates and especially the culture war. So, you know, careful where you’re sourcing, no matter who you are. And the goal of the Putin administration is very simple to get the United States to lash out, to get it to react badly, to get it to attack, but not Russia, to get them to do someone else. Which is one of the reasons why Greenland is featuring so hot and heavy right now, because the Russians are actively working now to get the Trump administration to attack a NATO ally. Don’t do it. All right, what’s next? 

Okay. Next. Squirrel. The idea that the Russians, the Chinese and maybe others will use, the United States grabbing of Maduro to justify military action in their own theaters. Can’t rule out what people will say, but this is certainly not going to nudge them in a direction. Be purely rhetorical. Let’s start with the Russians again. They’re in a full fledged war where they’ve redirected all of their military assets to one theater, and they’re not doing all that well. 

Also, we’re talking about a war where the Russians have literally set up rape camps and establish a cabinet level officer to assist and coordinate the mass kidnaping of children in the thousands from the occupied territories. We have over 100,000 documented war crimes. It is difficult for me to wrap my mind around what else the Russians feel they need justification to do in the Ukraine war. 

So, you know, it might make it out in a press release, but it’s not going to move any decision that they’ve already made. The second one is China, of course, gets a little bit squirrely, but still, I don’t think it’s going to change their meaning. If the Chinese thought they could do a lightning raid overnight and overthrow Taiwan, they would. 

But that’s not how advanced technocratic democracies work. Also, if they thought they could do it, they probably would have done it already. Keep in mind our discussion of military deployment capability before the Chinese don’t have it. The Russians don’t have it. No one really has it, except for the United States into a much, much, much, much lower degree. 

The French and the Brits, who mostly focus their deployments on territories they already control part of their other colonies of their empires, if you want to call them that. So, keep in mind that every war that the Chinese have fought on land since 1949 comes down to just two basic conflicts. One with the Russians, over an island and one with the Vietnamese where they had their asses handed to them. 

I’m not suggesting that the military of China is incompetent today. I will point out, however, that it is in the process of being massively purged and to think that their order of battle actually matches what they can do is a bit of a stretch. But the bottom line is that, vitriolic, rhetoric against Taiwan is bread and butter to the Chinese Communist Party, especially these last eight years, as she has basically purged everybody in the country. 

So if they start using some North Korea style rhetoric and not only wouldn’t be new, but it also has not shaped strategic policy to this point. Basically, these are authoritarian, expansionist, neo imperialist powers who are not constrained by rule of law or allies. They don’t need justification from anyone to attempt what they want to try to do. 

Their only constraints are physical, of which they have many. What’s next? 

The new president, Rodriguez of Venezuela, said that this was all Israel and the Jews……..What’s next? 

Okay. What else? That Venezuela is a warm up for the real country. Iran, which is clearly next. Probably not now. Cuba. Cuba’s probably next, and we’ve already dealt with that in a previous video. But Iran’s a very different situation. Well, the United States certainly has the military capability of interfering in Iran’s oil shipments, because you could either stop them at Kharg Island, where everything is loaded, or the Straits of Hormuz, which is a narrow passageway out of the Persian Gulf that everything has to pass through. 

That’s a lot different from taking up the political leadership. See, Venezuela wasn’t exactly a one man show, but it was definitely a strongman system with a tight cluster at the top that helped him loot the country. And then very little below. There may be a mass movement, of chavistas, but they’re not organized in the way that say, the Democratic Republican Party is. 

So, like, if someone were to take out the American leadership at the top, even every member of Congress, there’s still the states and localities, and there’s 2 million elites in the United States in the political class. That’s not the case in Venezuela. You had a couple dozen. And that’s certainly not the case in Iran. Two big reasons why Iran is probably not next. 

Number one is that elite, probably 10,000 mullahs are part of the clerical class, and it’s going to take a lot more than some Delta forces guys or a bad flu season to take them all out. So even if you could get the Supreme Commander, you wouldn’t be able to exercise the regime. The second problem is geographic. 

Tehran is definitely not coastal in the way that Caracas is just a few miles from the water. So you’re talking about inserting over a couple hundred miles of desert mountains? No. I’m sorry, I shouldn’t say desert mountains. A lot of these are not desert. It’s populated. 

And as the United States found out back in the 70s during the Carter administration, that if you try to send a bunch of helicopters to pull people out, there’s a really good chance that it’s all going to end very badly, just like it did with the hostage rescue back in 1979, I think. So much more durable regime. Much harder to get to. And I just don’t see that working. Doesn’t mean that there can’t be an angle for American policy on Iran that’s going to evolve because of this and become much more muscular and threatening. All of that is absolutely possible. But this isn’t a dress rehearsal in any way 

It’s a very different economic, political and strategic challenge to go after Iran.

Venezuela’s End: Was a Deal Struck?

Two hands shaking in agreement

There’s been speculation that a deal could have been struck between the US and a power like Russia or China that allowed the US to move on Venezuela. Let’s put that one to rest.

What could either of those powers have to offer the US in the Western Hemisphere? Russia is tied up with Ukraine and doesn’t have any meaningful investments in Venezuela. China might have some economic holdings in Venezuela, but they can’t project power far enough to disrupt the US.

So, no. There was no deal. The US acted unilaterally because, well, because it can. And I expect to see the US continue to dismantle Russian and Chinese influence out West in the coming year.

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Transcript

Hey everybody, Peter Zeihan here. Coming from Colorado, it’s, like 60 mile an hour winds outside. So we’re into this one inside. Ever since Nicolas Maduro was captured by the United States over the weekend, I’ve been getting a lot of questions about some of the details. And one that keeps coming up over and over and over is whether this is some sort of deal with the Russians and the Chinese, where the Americans get their way in Venezuela, and in exchange, the Chinese get their way in Taiwan and the Russians get their way in Ukraine. 

Short version is no, that’s not how the United States works. Not that the United States is not willing to make a deal. Not that the Trump administration, of course, likes to make deals. But for it to be a deal, there has to be something that the other side can give you in the in this case, with China and Russia, there isn’t, neither country has the ability to impose any sort of security reality, really, outside of the realm, near abroad, the military’s are very limited. 

The Chinese navy really can’t operate more than a couple hundred miles from her own coast. The Russians may need months in order to surge troops to a place on their border, and they have never demonstrated the ability, even at the height of the Soviet period, to operate outside of hemispheres in meaningful way. So when you look at, say, the Russians like, what is it that they can potentially hand to the United States and Venezuela? 

And the answer is absolutely nothing. I mean, at the height of Soviet power vis-a-vis American power, they were able to put some missiles in Cuba, which generated the Cuban missile Crisis, which is was a massive strategic defeat for Moscow. And they’ve never risen back up to that level again, certainly not in the post-Cold War era. And that’s before you consider that their entire military is now committed to Ukraine, and they just don’t have the ability. 

Now, the Russians did have some investments in Venezuela that is fair, but Venezuela’s oil company was more technically advanced, even after 30 years of degradation and looting than Russia’s oil companies are today. So that investment has gone nowhere. Basically, you had the Russians putting some money in to cover some of the expenses. The Venezuelans or the Americans did the work. 

Chevron specifically. And the Russians got a cut of the profits and some of the oil to some international markets. That’s gone to zero. There is nothing to trade. China sounds like a more productive player in the Western Hemisphere, but everything that they have done is based on investment, basically investing in ports and infrastructure in order to bring raw commodities, whether it’s soy, iron ore out to the coast and then on to East Asia. 

But again, that is something that they can’t do themselves, not that they don’t have the money. Of course they have the money. But the Chinese Navy, well, has almost 600 ships, really can only operate in a very limited distance about 10% of their ships can maybe sail more than 1000km from the coast and operate to a degree that they have been battle tested. 

Very important. But they’ve got foes in Japan and Taiwan and Korea and Indonesian and Singapore. They can’t get past the first island chain. Even if they could, they then be cut off from the whole island. And every ship that did that work would then be destroyed in the Pacific. The Chinese can’t operate in Latin America at all unless the US Navy is providing freedom of the seas for everyone. 

Now, ever since 1992, the US has been moving bit by bit away from that for a mix of military, strategic and political reasons. We haven’t hit the hard break yet where the United States is actively undermining the system. But wow, are we close because we now have the United States going after, say, for example, ships of the shuttle fleet that are working with Iran and Russia and of course, Venezuela. 

So it’s entirely possible that this is the magic year where that all breaks, in which case the entire Chinese position globally goes from being overextended to just be broken. We’re not there yet. That’s a conversation for another day. But for purposes of this question, was there a deal? No, because the United States, now, if it wants to, has proven they can just completely dismantle the entire Chinese position in the hemisphere with minimal military effort. 

And I expect we’re going to see a lot of that over the course of the remainder of this calendar year.

Venezuela Offers Trump an Oil Bribe

oil barrels stacked

Venezuela’s pseudo-newish-kinda leader, Delcy Rodríguez, just offered President Trump 30-50 million barrels of Venezuelan oil. Let’s just call a spade a spade, because this is an overt political bribe.

Rodríguez is trying to earn Trump’s stamp of approval, so her seat at the table is secured (spoiler alert: she’s no different than her predecessors). But this bribe has some logistical motivation as well. You see, the embargo on Venezuelan oil exports has left storage tanks full. And with nowhere else to store the crude, they either have to get rid of it quick or shut down production.

The US has a legal nightmare on its hands, because isn’t this still sanctioned oil? Are the refineries allowed to accept the stuff? Regardless, this oil bribe can either buy Venezuela some time (and secure a new leader’s seat) or mark the end of Venezuela’s status as an oil producer.

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Transcript

Hey, all on here come from Colorado. Today we’re talking about the bribe of the Donald Trump announced last night. I think there’s no other way. There’s no other word for it. Are you one on Truth Social and said that Venezuela was going to give or sell? Details were a little fuzzy. Somewhere between 30 and 50 million barrels of crude to the United States to be sold in the US markets, to be accepted, U.S ports to be processed by U.S refineries, and that he personally would manage the sale and, handle the proceeds personally. 

As the president of United States for the benefit of Venezuela and the United States. Details TBD. 

Two things here. Number one, it’s really weird to have a sitting president be really proud of a bribe. But, you know, here we are. It’s a weird, weird world these days. Second, the mechanics of why this is happening. The new president of Venezuela, Rodriguez, is attempting to flat out bribe the American president. 

This is not the first time she’s tried this. She came back in 2019. Remember? She’s also the oil minister and tried to give money to his election campaign. Didn’t work then. Now seems to be working. But she is trying to get the American stamp of approval that she is the thug in charge. She is not any better than Nicolas Maduro or Hugo Chavez. 

She simply is bending with the political winds. Right now, she’s established a far tighter crackdown in just the last three days. The Nicolas Maduro never did, even at the height of the elections. She wants everyone to realize that she is in charge and she has trumps behind her. For her new reign of tyranny. And of course, she was selected because she was very good at looting the system. 

So it’s a really interesting, political bedfellows, whether it will work or not depends on a thousand different things that I can’t predict right now. But let’s talk about that oil. The way oil systems work is you have a production. Well, it goes into a pipeline, it goes to a refinery, the refinery processes it, and then it goes on you typically by truck, train or some other method of transport to end users. 

And the trick is you have to maintain a flow all through there. Because if you have a hang up at one step, the pipeline will then have to divert its shipments off into, say, a storage tank. And storage tanks can only use so much. And for a country like, say, the United States, where we use something like 17 million barrels a day, you’re talking about a lot of flow through. 

Well, if you’re an exporter, you don’t necessarily refine your crude. It’s even more important then, because there’s no place to offload, there’s no local demand center that is strong enough to absorb a lot of the raw crude. So your only options then are tanks. And that’s the situation that Venezuela is in. Now. You see, a couple weeks ago, the Trump administration announced a full embargo on basically anything that wasn’t Chevron. 

And in doing so, tankers stopped arriving in Venezuela. So they had to start diverting all of their export flows to storage tanks. Now Venezuela has more storage tanks than most exporters, mostly because it’s not the exporter it used to be. They used to export 3 million barrels a day. Now it’s less than one, which means they actually had a fair number of tanks. 

But after two weeks, those have basically become full. And we’re now in the point that in the next day or three, if they can’t release that crude onto tankers to take it away, they’re going to have to shut down production because there’s no place else to put it. That’s the 30 to 50 million barrels. Gives you an idea of how little control the Venezuelans have over the intellectual property of their own system. 

They don’t know if it’s 30 million or 50 million. They just need someone, anyone, to take it in any price. Otherwise they have to shut everything down. And here is Donald Trump. So Rodriguez offers Trump the bribe. Trump seems very grateful. And we will find out in the next 48 hours whether or not the tankers will actually take it and carry it to the United States, and whether U.S refineries will accept crude that the president has very explicitly said is still under sanction. 

There’s a lot of legal questions there. And the people who would help untie those legal questions are the experts and, the people who basically do ethics investigations, the United States government, and they have all been fired. So a lot of people going to have to make a lot of really difficult decisions on legal liability very, very, very soon. But that’s the nuts and bolts of the issue. If this doesn’t work out the way that Rodriguez and Trump have identified, then the tankers don’t come. The oil stays in the tanks, and the entire Venezuelans oil sector basically shuts down, with the exception of what they can refining themselves, which is less than a quarter of a million barrels a day. 

So this could buy them some time to figure out something else. Or we could be at the end of Venezuela as an oil power right now.

Venezuela’s End: Next on the Chopping Block

Map of a bay of Venezuela

With renewed American activism in the Western Hemisphere, Venezuela has become just the first to get some “extra attention.” So what countries could be next on the list as the US reasserts regional dominance?

Blocking outside powers from gaining regional footholds will be a main priority, and countries like Cuba, Brazil, and Honduras all have their names in the hat.

The issue, of course is the destabilizing a government is the easy part. The real issue is what comes next. We’re talking massive time and personnel commitments to achieve any semblance of functional states…something the US has not prepared for.

The objective with all of this is security; keeping out Eastern Hemispheric powers and preventing them from establishing footholds in the region. And there are plenty of options outside of capturing presidents and military occupation to achieve that.

Prefer to read the transcript? Click here

Transcript

What is next? So, because this isn’t just about Trump, because this just isn’t just about Maduro or Caracas or Venezuela. The bigger picture is that the United States is going to start intervening in a lot of places in the Western Hemisphere. For a more detailed version of what this all looks like, Absent Superpower, my second book deals a lot with what I call dollar diplomacy and how that’s going to unfold. 

But in the midterm, we are looking at probably three main targets. The first one, of course, is Cuba. The personality that was most responsible for this policy change in the Trump administration is Marco Rubio. Rubio is the secretary of state and the national security advisor. In the first part of the Trump administration, he was largely shut out of the white House because Trump didn’t trust anyone who knew anything about international affairs, and he wanted his own people like Steve Wyckoff, who knew absolutely nothing about international affairs and bragged about it, was proud about it. 

He wanted them to take over. Well, after nearly a year of what cost? Trump has been made to look stupid over and over and over and over and over again in the eyes of not just the allies, but the Russians and the Chinese. And he’s found himself outmaneuvered on really every issue that matters. So Rubio was able to weasel his way back with all this way. 

That makes it sound bad. Anyway, start to do his job. Trump started to let him do his job again. And Marco Rubio is a descendant of a Miami Cuban family. So the Cubans were the Miami Cubans were largely ejected when Castro took over back in the 60s. And they’ve run, like in Caracas, basically a kleptocracy that calls itself socialist, that he’s not a really fan of. 

So when he had the opportunity to get control of foreign policy to a degree, which is, you know, what Secretary of state national security is supposed to do, he started getting the Trump administration more on board with taking action against Maduro in Venezuela. Well, Maduro and Venezuela, going back 25, 30 years, have been subsidizing the existence of Cuba with cheap, gasoline products and oil that now goes to zero. 

Cuba was already facing economic catastrophe because they’ve run their system into the ground as well. And those oil imports just subsidized oil imports were really the only thing holding the country up. And now that is gone. So the American administration doesn’t necessarily need to intervene militarily in order to tear Cuba down, basically just needs to up the economic blockade a little bit more. 

And it’s really difficult for me to see, without intervention, the Cuban system lasting more than a couple years at this point, throw intervention in. And, you know, of course, that can go any number of directions based on the type of intervention. The last time the United States tried to militarily intervene, it was the 60s. It was the Bay of pigs invasion, where we basically armed a bunch of Cuban nationals to go and take over their own country. 

It was a disaster because these people weren’t trained. But as we’ve seen with Caracas, if you include U.S. Special forces, the math changes. So I’m not saying that we’re about to hit Havana. What I’m saying is there’s going to be broad spectrum pressure on the entire Cuban system to break it. What happens the next day is a different topic. 

The next country to look at is Brazil. It’s not that Brazil and the United States really cross paths economically or strategically. It’s just that it’s the second largest, country in the hemisphere from a population and landfall interview. And, we’re on the other side of the Amazon and the other side of the Caribbean from one another. 

It’s actually faster, generally, to fly to Europe than it is to get to populated Brazil. But it is a major power. It does have a lot going on, and in a world where the United States is taking a more active role in the region, Brazil is going to have to find some way to basically make the Americans happy, because the Americans hold most of the cards here. 

One of the reasons why a regeneration of Monroe is so easy for the United States is we built our Navy for the Eastern Hemisphere, and it is more powerful than every navy in the Eastern Hemisphere combined by a significant margin, probably by a factor of 5 or 7. Right now, no one in the Western Hemisphere, except for the United States, even has a Navy that’s worthy of the name, which means the United States can choose the time and the place in the nature of any sort of conflict, whether that’s going to be military, economic or otherwise. 

Brazil has a long coast. Most of the population lives in enclaves on that coast that are loosely connected to the rest of the country. It is child’s play. If the United States wants to muck with internal Brazil to do so. And if you want even current politics into the situation right now, the Trump administration really doesn’t like the current Brazilian administration, because it’s passing a lot of laws that basically block the right to lie, and it’s trying to intervene in Brazilian politics. 

So that’s political allies who I have said nice things about Donald Trump, rise back to power. It’s gotten to the point now that the guy that’s of most concern Bolsonaro, who’s the former president, who’s currently in prison for trying to throw a coup against the current president, the Trump administration has tried to get him out of jail and preferably back in power. 

So there are thousand ways that this can go, because there’s a couple hundred million people in Brazil, and it’s a big place. But the degree that Washington is going to be in pressure on Brasilia is going to be huge. Probably not to the same degree as Havana. But it’s something that is probably going to be designed to break the country as a functional unit. 

And we’re going to see that not just with Trump, but with whoever is next. Third up, here’s a weird one. Honduras. So Honduras is a Central American country that used to be run by a drug runner. Well, that drug runner was arrested, was sentenced, convicted and put in prison here in the United States. And he said some nice things about Trump. 

And so Trump pardoned him. So we now have the United States actively intervening in the politics of a Central American country to attempt to resurrect a drug lord and put him or his allies back in power. That is going to be a shit show. But once you strip the Trump and the drugs out of it, the idea that the United States is going to start treating Central America as a region that will install personally hand-picked leaders, we are going back to the 1800s because that’s what we used to do then. 

Now, will any of this work kicking over the ant hill? That is really easy. Reconstructing something on the other side that is stable, that is almost impossible. We’ve tried to do it in rock. We’ve tried to do it in Yugoslavia, we’ve tried to do it in Afghanistan. There is an argument that we’re trying to do it now. In Syria. 

It usually doesn’t work unless you’re willing to put at least 100,000 troops on a country that’s the size of Venezuela, maybe 50,000, in the case of Cuba. I don’t think we have the troops. That would be necessary for a place like Brazil. And if you want to do it in Central America, keep in mind there’s not just one Central American country. 

It’s a strip. And if you just do it to one, you really haven’t fixed anything. So you have to do it from Panama all the way to Guatemala. And most of these places are broken states, making them look like Wisconsin is not an option. And the effort of doing something would be something that would be more involved than Vietnam and Korea and Afghanistan and Iraq combined. 

So at some point, Washington will have to come up with a plan that is more realistic. But as we have seen from the last several decades of American foreign policy making, not just this administration, Americans tend to bite off more than it can chew when it comes to reconstructing or nation building an area, and it never ends well, that doesn’t mean it still won’t work for American policy. 

Because remember, the primary goal here is to prevent eastern hemispheric powers from having a foothold. And while it would be nice to have economically successful countries that are political democracies aligned with the United States, the first and foremost concern is security and economic penetration. Which brings us to the last target that the United States is going to have, and that’s China. 

China’s entire geopolitical plan is for the United States to ultimately underwrite its geopolitical success. Its navy may be large, but it’s largely coastal. It can’t project power. Its population is dying out, literally. And their whole economic model is to make product with technology that stolen from the rest of the world and then exported to undercut other, potential competitors and shove products into their market and have the United States strategically underwrite the entire thing in Latin America, it has been partially about market access, but it’s mostly been about, resource access. And that is put Chinese footprints all over the region. The United States was always going to act against that. It looks like it’s starting now. In the case of Venezuela, most of the crude eventually ended up at teapot refineries in the greater Shanghai and Shandong region. 

That’s going to obviously end. So basically you should look at any investment that the Chinese have on the ground in Latin America now as circumspect and likely to be a target because the Chinese have nothing that they can do to protect it. 

And the United States has lots and lots and lots of options shy of kidnaping. The president in order to get rid of it.

Venezuela’s End: The Oil Question

Photo of black oil barells

Venezuela only has one realistic path forward: Oil. That doesn’t mean it’s a sure thing, though. So, let’s lay it all out.

Most production comes from the Orinoco Belt, but it’s complex and expensive crude. Without foreign investment and involvement, this is a no-go. The Lake Maracibo region offers lighter, easier-to-refine oil, with better export access and infrastructure. However, this is a bit of a lawless region, so it would necessitate lots of troops in addition to any investment.

Russia and China come out of this as clear losers, but some US refiners are going to take a hit, too. This isn’t the energy-security play that the US is looking for or needs. Venezuela has likely seen its last days as a major energy producer.

Full 12 minute analysis available exclusively on Patreon below:

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Transcript

Hey, all Peter Zeihan here coming from Colorado. Today we’re going to talk about Venezuela. But from perhaps a positive scenario point of view. The core issue is oil. That’s where all the money comes from. And if you’re going to reconstruct the country in any form, that’s where it’s going to be able to pay for itself. I really don’t see the Trump administration dumping $100 billion and regenerating the infrastructure. 

So let’s talk about what’s necessary and why and how it might might happen. Venezuelan crude falls today into two general categories. The first chunk, the chunk that is responsible for about 80% of the production is a place called the Orinoco Belt, which is down in the Amazon. It is not crude in the technical term. It’s something called Bitterman, which requires incredible amounts of energy and steam injection to liquefy it enough that you can bring it to the surface, and then you run it through something called an upgrader, which is kind of like a refinery, just to make it liquid enough to be stable for shipment. 

And then you have to inject something called diluted into it. So again, it can flow, and then you pump it north to the coast, where it’s loaded for export. This makes it the most expensive crude in the world per barrel produced and requires incredible technical acumen to function. Historically speaking, most of the work on the Upgraders, has come from US multinationals a little bit from, say, total in France. 

Schlumberger, Baker Hughes, all of those, oil services firms were heavily involved in the development of the program. And eventually they trained at PDVSA, which are PDVSA, which is the state oil company, to do a lot of the work. But that kind of came to a crashing halt back in 2002, when we first had a political coup against Chavez, followed by kind of an economic resistance against the professionals within PDVSA. 

When that process was over and Chavez re consolidated control over the country, he purged PDVSA. And what we found out was basically everyone who had an engineering degree didn’t like the guy and joined in the coup, and so he got rid of all of them. And since then we’ve had a steady degradation of what PDVSA can do. It’s no longer one of the most capable oil companies in the world. 

It’s barely holding together. And if it wasn’t for the presence of U.S. super major Chevron in some of these projects, most of them probably would have shut down, in order to get the Orinoco back up to what it could be. So it’s producing one 2 million barrels a day. You’re talking about investment, at least in the tens of billions, probably closer to 200, because there’s several stages to this process. 

Think of it kind of like what the Canadians do with oil sands, but remove easy capital access, remove the skilled labor, remove the rule of law, remove the physical pipeline linking it to the world’s largest consumer market. They have to do this all in the Amazon, more or less by themselves, without cash, but still bringing in foreigners. 

Very, very expensive projects. And I think the most likely outcome is that this is going to eventually fall down to zero, because they’re simply not going to be able to maintain it. The second part of the Venezuelan oil complex is a little bit more interesting from a functional point of view, if not a chemistry point of view, and that is the Lake Maracaibo region. 

Now, Lake Maracaibo is a large bay in the western part of the country and Zulia State that is connected to the Caribbean that has a mix of onshore and offshore production. If you go back to the mid 1990s, it was producing somewhere between 1.5 and 2 million barrels a day, which was the majority of Venezuelan oil production. And it is kind of a medium light mix instead of the Biderman that exists over in, southern Venezuela. 

As a result, produce production is a lot more basic. The geography is a lot more friendly, and most of the physical infrastructure to process the crude actually exists locally. There’s a large complex that technically could process about a million barrels a day, whereas Venezuela barely processes anything of that of the stuff that comes out of the Orinoco. But most importantly, you know, the Orinoco is basically asphalt, and so getting asphalt out of the ground is a bit of a bitch. 

Whereas the stuff in Orinoco again, light, medium, sweet, much easier to process. And the export options because it is on the water are much easier as well if there’s a solution here. For Venezuela, it lies in the Maracaibo region. A couple reasons. Number one, there is a line of the Andes that cuts the Maracaibo region and Zulia from eastern and central Venezuela. 

And so there’s always been kind of a semi secessionist view of the world compared to Caracas. So Caracas is a Republican project that was formed after the collapse of the Spanish empire, very anti-colonial, very pro-independence. But Zulia and Maracaibo are more like a post-imperial remnant who never really fully bought into the Caracas project. And while they’re not secessionist in the traditional sense, they definitely feel that they’ve been robbed blind by Caracas government, not just under Maduro and Chavez, but all the governments have come before, all the way back to the Spanish breakup. 

So I can easily see a devolution of the state of Venezuela or Western. Venezuela under Maracaibo kind of goes one way and Caracas goes the other way. Caracas falls apart, Maracaibo is more stable. And that’s before you consider things like the United States getting involved, because if you are an American energy company, the Mark region is a far more friendly environment to operate in than the Orinoco. 

You don’t have to deal with the jungle. You don’t have to do the interior. You don’t have to deal with the capital. You don’t have to deal with, you know, to fight the geography. Everything’s just easier. But easier is not the same thing as easy. Because this is a region that has been denigrated by Caracas for decades. 

Centuries, almost. It’s not a great place, especially right now. Civil control and law enforcement has largely collapsed. You have organized crime, gangs running rampant through the area. The Trump administration said that the Caracas government was facilitating drug shipment to the United States. 

Maybe that was true, but there’s a lot more going through, more Acabo. Maracaibo also has literal pirates like Arg and Eyepatch, that basically raid the entire area. All the time. So if, if, if you’re going to have an economic renaissance in Venezuela or even just one in Maracaibo, in Zulia, first thing you have to do is secure the area and reestablish law. 

And because Venezuela is not a naval power, you’ve got Maracaibo city on the far north side of Lake Maracaibo and the rest of the population of Zulia on the south side. You’re now basically talking about occupying, stabilizing two disconnected sections. So you’re talking about tens of thousands of troops. If you want to make this happen. But that is still the low hanging fruit in this question. 

So much easier than Orinoco, even with all those complications. So let’s talk winners and losers. Most likely this isn’t going to work. Most likely we’re seeing the beginning of the end of Venezuela as an energy producer at all. First loser is, of course, Russia. The Russians bring no technology whatsoever to this fight. Basically their presence was geopolitical. 

To stick it to the Americans, that goes down to zero. They’ll lose absolutely everything that they put in. Second biggest loser is China. China has spent the last 25 years expanding its refining complex to run crude, different kinds of crude from different parts of the world, including Venezuela. The idea being that eventually they’re going to have a fight with the United States. 

And the more diversity they have for options, the better. And so they have sunk tens of billions of dollars into Venezuela to basically prepay for crude. And right now they are owed about 15 to $20 billion in Venezuelan crude. That is now all complete right off. In addition, the refineries that they have built in Shandong and near Shanghai to specifically process Venezuelan crude, they have now lost their only source of crude. 

They will not get it back. So this has been a huge risk for the Chinese that now is being manifested as a complete loss. Other big losers. It really depends upon what happens with the oil sector. If I’m right and this all goes away, then the biggest loser is probably the refineries in the US Gulf Coast region. 

A lot of them were designed to run on this sort of crude, and it’s just going to stop. They can still use, Canadian crude, but the price differential is not going to be as favorable if Venezuelan crude falls off the market altogether. So even if they can replace all the barrels they need, the cost per barrel is going to rise, and that’s going to force them to take a more diverse type of crude. 

And that means less heavy and more sweet. Keep in mind that the U.S shale industry produces exclusively super sweet, super light. So we’ve been in this weird position in U.S. refining for the last several years, where the refiners on the Gulf prefer to take Venezuelan Canadian crude and the United States exports its light sweet to the rest of the world. 

All we need to do is switch that so that we process our own. But that’s easier said than done. If you’ve spent a few billion dollars upgrading your refinery to run the heavy stuff. Heavy crude is typically used for things like asphalt, industrial products and diesel, whereas light sweet crude is usually used for gasoline consumer products. anyone who’s in refining will tell you that is the short story and hides a lot of nuance. I agree, but this is not a video about that. Winners in that scenario, of course, are Canada, because one of the problems that Canada has been having is it sells most of its crude into the American market. 

The American market is the most super saturated energy market in the world. And anything coming out of the Caribbean, Venezuela goes to the US Gulf. So they’ve basically been selling at a massive discount, but sometimes it’s $25 a barrel that now closes and should allow the Canadians to get a better leg up. And that’s before you consider that they have a pipeline that’s kind of sort of working, shipping crude to their West coast now. 

All right. What am I leaving out here? This isn’t an energy security play for the United States. I know a lot of people said that the United States was doing it for oil. And Trump is all about oil. United States is the world’s largest producer of crude. We export 5 million barrels a day of refined product, which is significantly more in refined product than Venezuela ever, ever exported in terms of raw crude. 

So while there might be an economic play here for Exxon and Chevron in the rest, if if the country stabilizes the investment required to make it stabilized and you have to do that first is massive, then you have to go in and physically reconstruct infrastructure that has been dilapidated for decades. And in most cases, just needs to be ripped up and replaced wholesale. 

The one possible exception is Maracaibo, where in theory, in five years you could get output up from its current 200,000 barrels a day to maybe a million. And in theory, the refining complex there, while massively outdated, is still broadly functional and could be rehabilitated without a complete reconstruction. But you are still talking about investment on the front end in tens of thousands of troops, and on the back end in tens of billions of dollars. 

That is not something that I think the American population will support. That is not something I think the Trump administration is interested in. And that’s not something that I think the American super majors are going to get involved in it anyway, considering that there’s so much more crude and other places that are so much easier.

The Beginning of Venezuela’s End

A person walking draped in a Venezuelan flag against a desaturated background

The first domino of regime change in Venezuela has been toppled, as the Trump administration has imposed a naval blockade on the main oil export ports.

No oil exports mean Venezuela’s income vanishes. That means food imports stop. Food shortages will give way to unrest, which will give way to regime collapse. So, what kind of situation will we be looking at once the final domino falls and Maduro relinquishes power?

It’s not going to be pretty. We’re talking about a grim humanitarian outlook, a scary security picture, and an ugly transition of power.

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Transcript

Hey, all. Peter Zeihan here coming to you from Colorado. It is the 17th of December. You’ll see this on the 18th in the morning. And we are. Go for regime change in Venezuela. The Trump administration has started a formal blockade of the ports, specifically to prevent the state of Venezuela from generating any foreign currency, which is used to not to support the regime but hold the country together. 

There are three ports. There’s one just off of Caracas, which is the really minor one. There’s two larger ones, to the west, and east of the country. There’s no interconnection of the oil pipelines among the three. So you basically have fields in the markova region that generate somewhere between one fifth and one third of the country’s crude, very easy to block. 

There’s a very narrow network. Basically, you can do that with one ship and you’ve got to Port Jose out on the east side, which is where about two thirds to three quarters of the exports flow. That’s a little bit more difficult. But again, for the US Navy, this is very, very, very minor. Not hard to do at all. 

And so Venezuela is now going to go from a country that exports about a million barrels a day of crude to one that exports none. And this is something like 90% of the hard currency earnings of the country. And that money is what is used to maintain the regime and to purchase the roughly 80% of the country’s food that is imported. 

So within a matter of days, we’re going to be having food riots because they really don’t have much stored up. And then without the currency, you we’re probably going to see the regime start to crack. A couple things to keep in mind. First, locally in Venezuela and then the broader world. Number one, this is a country that is armed to the teeth. 

That doesn’t mean that I think that it helps the government. But back under Chavez, over a million ak47s were handed up to the population. And so any force that goes in or any force that’s local that tries to assert authority, regardless of their political backdrop, is going to have a horrific time. And we’re not so much looking at a civil war or a civil breakdown, in a country with over million people. 

So the outcomes for Venezuela are beyond dire, and we should expect a general breakdown of civilization here over the course of the next several months, unless the Trump administration changes its mind really aggressively. You’re not going to have a foreign force that can put this right. You’re not going to have a local force that can maintain authority. 

There just too many weapons in too many hands for that to be one of the reasonable options. Which brings us to the second thing, that the oil that comes out of Venezuela is going to go away for at least several years. Right now that’s only a million barrels a day. But something the Trump administration has shown is that we can now have a sovereign state going specifically after oil tankers of the shadow fleets. 

And a lot of these tankers don’t just service Venezuela, they also service Iran and Russia as well. And we have now broken the Seal and other countries, or maybe the United States as well, is probably going to start going after those other shadow tankers as well. A 1 million barrels per day disruption out of Venezuela for a market that is at the moment probably oversupplied is not a big deal. 

But then you add another million from Iran and perhaps as many as 4 or 5 million from Russia. And you’re talking about a very different world. So we are at the start of a very significant international shock in energy. And calendar year 2026 is going to be a wild ride.

War Crimes, Drugs, Venezuela, Pardons…and Dancing?

Unclassified footage of the first airstrike (1 September)

When the US starts publicly admitting to war crimes, we ought to pay attention. So, let’s look at what’s going on with Venezuela.

Trump has announced imminent strikes on Venezuelan territory. Our most powerful aircraft carrier is already sitting in the region, so things could move very quickly. However, the administration still doesn’t have clear objectives for this operation. If cutting off drug inflows to the US is the main goal, how does pardoning the former Honduran president, Juan Orlando Hernández, who was convicted of orchestrating major cocaine trafficking routes, fit into that goal?

The inconsistency coming from the White House on drug-war priorities is indicative of the broader chaotic nature of this administration. It looks like the new year is poised to be an…interesting one.

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Transcript

Hey, Peter Peterson here, coming to you from Colorado. Today we’re going to talk about what’s going on in Venezuela in the world of Coca Cola. This is going to be a little all over the place because reality is a little all over the place. First of all, war crimes investigations are in play is a short version. 

According to the white House, according to the Defense Department, according to Donald Trump, according to Defense Secretary Hegseth, one of the things the U.S. military has been doing is after it blows up a boat that is allegedly, smuggling cocaine from Venezuela to the United States. If there are any survivors that go in and strike it again, under every treaty the United States has ever signed regarding war crimes, this is a war crime. 

I mean, that’s flat out, going after somebody who can’t shoot back, who’s already been defeated and is basically executing them. This is a lot of what the Russians have been doing in the Ukraine front. This is one of the things that the United States decided back in the 40s should never be allowed to happen again. 

And now we have public admission that this has been happening. The only question is at scale. Now, once it was explained to some people in the administration that this is actually a war crime, there’s been a lot of backtracking, where this will go that’s entirely up to Congress. Which brings us to the second piece, land invasion. 

Trump has now publicly said that strikes on Venezuela on shore are imminent. In fact, they might have happened by the time you see this video. We still have not had the administration present any information on the drug smuggling, on potential actions to Congress. We’re very clearly in violation of the War Powers Act, which was something that Congress put together in the aftermath of Vietnam to make sure things like this could never happen again. 

And Trump is very clearly violating that. But until and unless Congress decides to stand up for itself, there is no functional check on executive power on this topic. We still, according to Republicans in Congress, haven’t had the administration produce any meaningful information on the strikes that have been happening so far on any of the intelligence suggesting that these strikes were against vehicles, were actually smuggling drugs, or really anything about the operation. 

And we already have, America’s most powerful aircraft carrier in the region. As for what the administration’s goals are, they are now deciding what those are. On Monday, we had a national security, meeting in the white House that included, among other people, the secretary of state and the secretary of defense, the Joint Chiefs, where Trump started to discuss, started to discuss what the end goal might actually be. 

It looks like the United States has concentrated force in the region before even coming up with a general approach, much less a goal. We have had a conversation confirmed by the white House between Donald Trump and the Venezuelan president, who was Nicolas Maduro, where he basically told Maduro to leave. Maduro said no. And so now Trump is left deciding, you know, this. 

Do we go in and take him out? Do we then install a government in the aftermath? Keep in mind that Caracas, the capital, might look like it’s close to the, coast on the map, but it’s actually on the other side of a thin mountain range. And so an occupation there would be at least as difficult as something like we did in Iraq. 

And this is a country that already imports over 80% of its food. So a mass famine event without massive American logistical support would almost be baked in at this point. We don’t know if you’re confused. You’re not the only one. The administration really hasn’t made any decisions or provided any information. It’s just acting, which is in general how you get into big, drawn out, nasty in broad clios. 

If you think I’m defending Maduro. Nope. The guy’s a nut job. So Maduro is a former bus driver who was appointed by Chavez Chavez as kind of the Chavez as kind of the Venezuelan version of Trump. To be exact, his successor. So we have a former bus driver as president. And after his call with Trump, he went on the air and pledged his undying loyalty to the Venezuelan people and then started dancing. 

Because apparently that’s what you do in Venezuela now when you’re a former bus driver. On the drug front, back in the United States, Donald Trump has pardoned a guy by the name of. Let’s see. What is it? One, Orlando Hernandez, who is a former president of, Honduras. Now, Hernandez has been convicted, not not accused, convicted in U.S. court of law of being the single most consequential person in Western hemispheric history for establishing routes for smuggling cocaine and other illicit narcotics into the United States. 

He was sentenced to 45 years in prison and is now he’s out, free. He and his wife are among the most corrupt people in Western hemispheric history, which is saying something. And he used the tools of the state to establish multiple trafficking routes in collaboration with the Mexican cartels. The difference between him and Maduro is that Hernandez has been convicted. 

I mean, there’s really no doubt at all as to his guilt, whereas Maduro is merely accused. And, Hernandez said nice things about Trump, and that got him the, the pardon. So we have this bizarre mix of policy indecision, rudderless leadership and a rhetoric against drugs, but a practicality that’s actually encouraging them. Now, about the only good news I have on this general topic is that Congress passed and Trump has signed into law, something that puts a couple billion dollars into opioid and opiate, recovery for people, 

But the net effect is that one of the most effective things that U.S. law enforcement has done against narcotics in the last 15 years was just undone by a pardon. And instead, were focusing on a country that is. Let’s to be perfectly honest, a marginal player in drug smuggling to the United States, not saying that Venezuela is not part of the problem, but, if you really want to go after drug smuggling, you start with where the stuff is produced. 

That’s Bolivia, Ecuador and Colombia. And then you collaborate with the Mexicans to break down the cartels. Venezuela is a sideshow. Hernandez and Honduras, of course, were part of the court system. Okay. If that’s a little all over the place, it’s because the world is all over the place right now. Apologies for that. I will try to get the world into order for the next video.

Imminent US Strikes Against Venezuelan Government

A US Fighter jet conducting a barrel roll

It appears that US military strikes against the Venezuelan government are imminent. Let’s take a look at what passes for a military in Venezuela.

Prefer to read the transcript? Click here

Transcript

Hey, all. Peter Zeihan here coming to you from Colorado. And today we’re talking about Venezuela because it looks like the United States is getting ready to overthrow the Venezuelan government. We now have the USS Ford, which is the largest and newest of the American super carriers in the region, by far the most important and powerful battle platform that humanity has ever created. 

A along with roping in certain countries in the region like, say, Trinidad and Tobago, which are directly off the coast of Venezuela. And then, of course, the US facilities in Puerto Rico being used very aggressively to push troops and ships into the regions. 

Let’s talk about what the other side looks like. Okay. That’s about it. One of the fun things about Latin American militaries is back in the 1970s and 1980s, they were involved in coups. And so when democracy kicked back in in the 90s and 2000, the military’s were deliberately gutted. 

And so as a result, they’re really not capable of much. 

Venezuela was a partial exemption to that because in Venezuela, you actually had a relatively robust democracy throughout this entire period until a guy by the name of Hugo Chavez, who was a military dude, through his own coup and overthrew the democratically elected government and basically imposed an authoritarian system that has since, under his successor, become flat out dictatorial. Chavez. Maduro and their click have basically robbed the country blind, ripping up everything that wasn’t bolted down and even a lot of things that were bolted down and basically destroying the entire, non-oil economy of the country. And they haven’t exactly done a great job with the oil economy either. So what used to be the most technically, educationally, and industrially advanced country in all of Latin America is now a laggard. 

What that means for the military. Well, Chavez, when he came in, was not a general. I think he was a colonel. Was even that? No, I don’t think he was even that. I’m not a big dude. So his coup wasn’t really military in the traditional sense, and the military had been a pillar of support for the old government. 

So Chavez started by buying off the leadership of the military directly, but no longer really purchased a lot of equipment. Then when it became apparent that he was going to be opposed to the United States and he realized the military hardware would be useful. He started buying hardware from the Russians. But the Russians, not having a lot of respect for Chavez, sold him a lot of crap. 

That didn’t even operate when it was purchased in the 2000. Well, it’s now 2025. And for the last several years, the leader of Venezuela has been a bus driver. So the military has not been given a priority. It’s been gutted of all of its leadership. It’s basically been turned into a corruption sieve. And they haven’t gotten really good equipment since the 1990s. 

So if it came up to a straight up fight between the United States embassy guards in Caracas and the Venezuelan military, I would bet on the embassy guards. Even those are only a couple dozen of them, because they’re Marines and dirt. In a straight up fight between the military of Venezuela and the military, the United States. There’s no math here. 

If the United States decides that it wants to knock off the government of Nicolas Maduro, this is an operation that will be measured in hours, days if they get really lucky. That doesn’t mean that this is a great idea, because there’s always the question of what happens the next day. Knocking the government off is the easy part, especially in a place like Venezuela. 

Putting a government back together on the other side. Well, the United States tried to do that in Iraq and Afghanistan, and we saw how much fun that was. Venezuela is in better shape than Afghanistan, but I’d say worse shape than Iraq was under Saddam. 

Oh, and one more thing. Under the previous government, Chavez, the Venezuelan government 

imported a huge number of AK 47. Not for the military, but for the population. And then built an AK 47 facility to make more. By a very, very, very, very conservative assessment. There’s 100,000 AK 47 in public circulation with the approach of eastern gangs. 

And a probably a more realistic number is upwards of a half a million. So no matter who the next political authority is who tries to run Venezuela, there are literally hundreds of thousands of assault rifles in the hands of a population that has literally been paid for the last 25 years to be on the side of the government that will now be deposed. 

So whatever comes next to Venezuela, Lord, it’s going to be messy.