The dramatic U.S. operation to capture and extradite Venezuelan President Nicolás Maduro on Jan. 3 marked a significant shift in the Trump administration's policy toward the Western Hemisphere.
This intervention raises critical questions about U.S. political intentions and their intersection with energy concerns. How should we interpret this evolving approach? What are its underlying goals, and are they feasible in today's geopolitical landscape? Does this intervention signal a break from historical U.S. policy or a continuation of fundamental American attitudes toward the region? How do oil and the concept of "energy security" influence U.S. actions toward Venezuela? Can private firms cost-effectively increase Venezuelan energy exports? Finally, how will local political dynamics and history shape the response and effectiveness of this new policy?
To provide clarity on these unfolding issues, a panel of experts was convened on Jan. 20 by the Irving Institute for Energy & Society, the Davidson Institute for Global Security at Dartmouth, the Dickey Center for International Understanding, and the Office of the Provost. The discussion, moderated by Barbara Will, Vice Provost for Academic and International Affairs, featured insights from a distinguished panel:
Press clarified the extent to which the current approach to Venezuela is either a continuation or a departure from established policy. By examining this event through the historical lens of the Monroe Doctrine, Press said we can identify patterns that elucidate the motivations behind President Maduro's recent capture, its implications for contemporary U.S.-Venezuela relations, and the likely future U.S. stance toward the Western Hemisphere.
First articulated in 1823, the Monroe Doctrine resurfaced during the Cold War as a strategy to counteract Soviet influence in Latin America. Press noted, "The rise of China has reactivated and energized Monroe Doctrine thinking." This mindset was particularly pronounced during the Cold War, and especially evident during events like the Cuban Missile Crisis and various proxy wars against pro-Soviet guerrillas. Post-Cold War, Press said, "The U.S. has enjoyed maximal power and minimal threat," leading to a decline in the Monroe Doctrine's relevance.
Today, however, its significance is renewed. "Rivalry is back. Geopolitics is back. China is building political and economic ties across South and Central America," Press said.
This development has prompted the U.S. to refocus on regional exclusivity, indicating to Press that a more assertive approach to the Western Hemisphere is likely to prevail beyond the Trump administration.
A central theme of the discussion was the pivotal role of energy security in shaping U.S. actions toward Venezuela's vast oil reserves. "Oil plays a key role in geopolitics. It still powers economies and military forces," Press said.
With fossil fuels currently accounting for 75% to 80% of energy supplies for most nations, Barbknecht stressed the critical importance of energy security for all countries, especially highly industrialized countries. "Energy and security is a topic all over the world. Oil, gas, and coal are main drivers of economies worldwide," he said.
As a visiting scholar from Germany, Barbknecht underscored the importance of a stable energy supply. "Recent aggression from Russia against Ukraine influenced oil supply and prices," he said. "Prices peaked in 2022 due to a lack of availability from Russia," highlighting that energy security is a critical issue in Europe.
Reactivating Venezuela's oil production faces several significant obstacles, including investment needs, infrastructural deficits, and the political outlook.
"Despite the fact that Venezuela has huge reserves, is it worthwhile to invest in Venezuela in the short term, the middle term, or the long term?" Barbknecht said. Based on several published analyst calculations, he considers it a long-term investment spanning several decades that could require more than $160 billion. These investments further increase the already very high extraction costs in Venezuela.
Davis shared that perspective, noting the complexities involved in reviving Venezuela's oil production, which currently stands at only a third of its peak output from the 1990s. Despite possessing the world's largest proven oil reserves—around 300 billion barrels—the predominantly heavy oil presents significant production and refining challenges that diminish its value.
"The resources in the country are so big that companies will look seriously and constructively at the opportunity," Davis said. "However, the history in the region and experience from around the world will make investors cautious." Consequently, he thinks that companies must carefully weigh the substantial capital investments against potential risks.
To attract investors, Davis thinks that the investment environment in Venezuela needs significant change. Companies will be comparing the terms of development and production with the range of international investment alternatives, such as Guyana and the Permian Basin. Adequate incentives must effectively balance risks and rewards. Currently, Venezuela mandates majority ownership by state-owned PDVSA of joint ventures with foreign investors; easing this requirement could enhance foreign interest. Furthermore, the rule of law remains a serious concern, as Venezuela's history of nationalizing foreign assets complicates profit recovery, even when legal protections are in place.
Creating a secure environment for both people and investments is critical for fostering a successful investment landscape. This effort involves establishing conditions that welcome foreign participation and ensure robust investment protection.
According to Davis, the United States can play a crucial role by lifting sanctions, providing financial backing through export-import banks, and enhancing security conditions. Building a political climate that encourages foreign engagement is essential for sustainable growth and mutual benefit.
Irving Institute Faculty Director, Geoff Parker noted that "while the business case for new Venezuelan production is still undefined, one reality remains. The large-scale reintroduction of Venezuelan heavy crude would pose a challenge to decarbonization efforts by expanding the supply of more carbon-intensive barrels."
The discussion further illuminated the intricate political landscape in Venezuela, focusing on the power dynamics within the interim government and its relationships with neighboring countries, including Colombia and Cuba.
Even with Maduro's ouster, the regime remains largely intact under new leadership. "The regime has different factions, some closely aligned with the Venezuelan army, which serves as a key power structure," said DeShazo, a former diplomat who served in Caracas and other posts in Latin America.
"While the U.S. currently has leverage over the marketing of Venezuelan oil, the chavista regime retains control over its territory and key institutions, and it is therefore unclear to what degree and how the U.S. will be able to exercise influence over the Venezuelan government and over the oil sector," according to DeShazo.
Additionally, Venezuela's relationships with its neighbors, as well as with China, Russia, and Iran add layers of complexity. "Further pressure from Venezuela on Guyana is unlikely, thus enhancing opportunities for foreign investment in Guyana's oil sector," said DeShazo. He believes that "Securing the conflict-ridden border with Colombia remains vital because it is a major focus of coca production and criminal and insurgent activity."
"Colombia is a key ally in the region. The U.S. must build stronger ties to cooperate closely with Colombia to rein in drug trafficking and guarantee citizen security to uphold the rule of law," DeShazo said. He added "Critical questions arise regarding whether the U.S. will provide the necessary support in assisting Colombian efforts to assert legitimate state authority against illegal armed groups and whether it will aim to drive a wedge between Cuba and Venezuela to put further pressure on Cuba."
Under then-President Hugo Chávez, who died in 2013, Venezuela supplied Cuba with 100,000 barrels of oil per day under favorable conditions. However, this figure has plummeted to between 20,000 and 30,000 barrels, exacerbating the worst economic crisis Cuba has faced since the Castro regime took power.
"Severing relations between Venezuela and Cuba would deeply affect Cuba, and U.S. policy toward Cuba would likely apply more pressure for regime change," DeShazo said.
The discussion concluded with key recommendations for the Trump administration regarding Venezuela. Press emphasized the importance of clear communication with both allies and adversaries to support behavioral change. DeShazo stressed the need for a timeline aimed at democratization in Venezuela. Barbknecht suggested formulating multiple contingency plans, drawing lessons from European recent experiences, while Davis highlighted the need for long-term solutions geared toward ensuring stability for investments.
More than 70 people attended the panel in Haldeman Hall. The discussion can now be viewed online.