By his own telling, Trump’s promise to “run” Venezuela is driven by what he sees as a business opportunity, and what his critics see as plain-and-simple plunder.
“The oil business in Venezuela has been a bust, a total bust,” Trump said during a press conference Saturday after the operation to capture President Nicolás Maduro. “For a long period of time, they were pumping almost nothing, by comparison to what they could have been pumping.”
Later, he added: “We are going to be taking a tremendous amount of wealth out of the ground.”
Trump appears to view Venezuela the way private equity investors view bloated chain restaurants — namely, as underperforming assets, hiding under a scaffolding of overhead costs that are ripe for re-structuring — and with the proceeds going back to the guys behind the takeover.
The president said as much about Venezuela over the weekend. At the same press conference Saturday, Trump said US oil companies are going to “fix” the infrastructure “and start making money.”
Trump doubled down on his oil-based justification for attacking a sovereign nation in a phone call with “Morning Joe” co-host Joe Scarborough on Monday. According to Scarborough, who recounted their conversation on the air Tuesday, Trump said the difference between the US’s invasion of Iraq in 2003 and the current operation in Venezuela is that President George W. Bush “didn’t keep the oil.” “We’re going to keep the oil,” Scarborough quoted Trump as saying.
The Trump administration’s plans for Venezuela beyond that are vague and light on details so far. But some parties are already poised to make money.
One mystery trader using the crypto-based betting site Polymarket wagered $32,000 that Maduro would be removed from office by the end of January. That trader, who reportedly joined the platform just weeks before the US operation, raked in a $400,000 profit. While the trader’s identity isn’t known, several experts have suggested the newness of the account and the size of the bet indicate someone who was trading on insider information.
Then there’s Elliott Investment Management, a hedge fund that specializes in buying distressed assets, and its billionaire founder, Paul Singer, a Republican donor who spent at least $5 million on Trump’s reelection.
In November, an Elliott subsidiary won a bidding war for Citgo, the oil refiner owned by Venezuela’s state-run petroleum company. A judge approved an Elliott bid for about $6 billion for Citgo assets that analysts estimated to be worth double that amount, setting the fund up for a potential windfall if the acquisition, which Maduro opposed, is ultimately approved by the US Treasury. (Elliott didn’t immediately respond to a request for comment.)
Still, the US oil industry isn’t nearly as eager as Trump is to dive into such an expensive project in an unstable country. First of all, Venezuelan oil is considered relatively low quality, making it expensive to extract and refine – a tough sell in a world with low oil prices. And that’s before you get into the politics of it all. As one industry source told my colleague Matt Egan this week: “Just because there are oil reserves – even the largest in the world – doesn’t mean you’re necessarily going to produce there… This isn’t like standing up a food truck operation.”
Trump is right that there are theoretically lucrative assets in Venezuela, and many people, including everyday Venezuelans, are happy about seeing Maduro out of power. But the biggest benefits, so far, appear limited to a hedge fund and an unidentified gambler. It is far less clear how the takeover benefits everyday Americans given that any oil supply advantages would be years away.
Like private equity deals, Trump’s move-fast-and-take-the-oil strategy comes with a lot of risk.
“Gunboat diplomacy, coupled with a systematic lack of regard for basic safeguards to prevent self-dealing, is very, very dangerous,” said Daniel Weiner, director of the Brennan Center’s elections and government program, told me. “I think everyone is rightly alarmed by that.”
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