Recent US action in Venezuela is most plausibly a White House bid to control the flow of black market oil — not drugs.

The US seizure of Venezuelan leader Nicolás Maduro is being framed publicly as a counternarcotics and democracy-restoration operation. But it is oil — not cocaine or fentanyl — that sits at the center of events. Venezuela’s vast reserves, its role in gray and black energy markets, and its position within a broader geopolitical contest over oil supply explain far more about the timing and scope of the intervention than narcotics enforcement ever could.

Venezuela is no longer the oil superpower it once was. Production has collapsed from more than three million barrels per day in the late 1990s to under one million today, placing the country outside the top tier of global producers. Still, oil remains the backbone of the Venezuelan economy, accounting for roughly 95 percent of export revenue. In a world where energy markets are increasingly shaped by sanctions, supply fragmentation, and political risk, even marginal barrels matter — especially when they are sold at a discount and routed outside formal channels.

In recent years, Venezuelan oil has flowed largely into opaque markets, particularly to China, often via intermediaries and “ghost ships” that mask origins to evade sanctions. These barrels are not priced at global benchmarks; they are sold cheaply, quietly, and strategically. The result is not simply lost revenue for Caracas, but distorted price signals across the global oil market. Interventions disrupt price discovery. Sanctions do not eliminate supply — they reroute it into less-transparent channels, where prices convey less information and capital allocation becomes more politicized.

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