Back to oil, the new data

The US invaded Venezuela, abducted the latter’s president and his wife, and charged them with narco-terrorism. However, one of the main reasons behind this bizarre, seemingly illegal, and anti-global act is the fact that Venezuela holds the largest oil reserves in the world. There was a time till the late 1990s when the nation could produce almost 10 million barrels per day. Since then, Venezuela witnessed rules by a few socialist governments such as those led by Hugo Chavez, and Nicolas Maduro. Madura, the abducted president, is now an arrested ‘criminal’ in America.

Several media articles speculated about the reasons behind Donald Trump’s reckless and such one-sided act that is akin to a de facto invasion of a country, and infringement with its sovereignty. Well, the fact of the matter is that it boils down to a resource that mattered as much a century ago. From the 1920s to 2026, despite hiccups, ups and downs, oil is still a powerful medium of leverage to exert massive control over the global economy, and producer-consumer nations. Forget about data being the new oil; oil is the data. In several cases, Trump’s animosity and rivalry slips on slick surfaces.

Just before Venezuela, the US announced that it was bombing the terror group ISIS’ bases in Nigeria because they were indiscriminately killing Christians. For close to five decades, Christians in many parts of Africa were slaughtered. America was least bothered. Now, Nigeria matters because not only does it produce a lot of oil, it has massive reserves. Look at what is happening in Iran. Every now and then, the US seems to be on the verge of sponsoring a regime change and encouraging street protests there. There is no doubt that Iran’s regime is authoritative, ultra-conservative, and has no respect for human rights.

But Iran is an ancient civilisation, and followed independent policies for the past several decades, apart from America-sponsored Shah’s regime. It is one of the largest producers of oil, and faces severe American sanctions. Russia is another massive producer of oil, and faces severe western sanctions Iran, Venezuela, Nigeria, and Russia may find it virtually impossible to sell oil legally. Trump has announced that the US will control Venezuelan oil. What does this mean? It implies that at one stroke, the US and its allies have cut off, will do it, or take over almost a quarter of the global supply.

Let us now look at some of the largest energy guzzlers. The biggest consumers are China, America’s Enemy No. 1, and India. Then comes Japan followed by many Asian countries. These nations are dependent on oil supplies from Venezuela, Nigeria, Iran, Iraq, and Russia. The last one became a major supplier after the invasion of Ukraine in 2022. By 2026, America coerced Japan and India to buy more oil from America, and non-Russia sources. The same is true of the Asian nations. Oil power, and the related geopolitics and global games that began a century ago are back with a vengeance.

Who said, history does not repeat itself? In the early part of the twentieth century, the global powers, predominantly the UK and the US, captured access to the newly-discovered and massive oil reserves in West Asia, or the Middle East. Since then, the region West Asia remained a key fulcrum that directed the power geopolitics behind oil, which still dominates the fossil fuel market. Saudi Arabia, Iran, Iraq, Kuwait, Oman, Bahrain, and Qatar remain the key players in the global market, which was the case since the two world wars.

There was a phase, beginning in the early 1970s, when a group of oil nations, OPEC, dictated oil prices. It was primarily controlled by the producers in the Middle East. But the phase did not last long as the US controlled the oil barring the production in Iran, Libya, and Iraq. We know what happened in Libya and Iraq. We know what the US wants in Iran. Now, it is Venezuela’s turn, which is a major supplier of oil and metals to China, and has ties with Russia.

Yet another ironic twist in the tale is how the US dealt with global powers in the past. Apart from the UK, which was in decline after World War II, the main rivals were Germany, and Japan. Germany did not have direct control over oil, and the US effectively blockaded oil from reaching Japan during the period. Without going into the details, this sums up the story of the second world war, and its winners and losers. Oil largely decided this. Will the world witness another global war that is linked to oil?

Only the equations have changed. America’s most-crucial rival, China, is not a pushover. It has the economic means, military might, and geopolitical presence, apart from the control over crucial non-oil resources. Indeed, despite Trump’s trade-and-tariff tactics, China is winning the economic war. It pushed Trump to agree to a temporary truce. The trade battles in 2025 indicate that the Red Dragon has come of age, and will not be bullied by the US. Although China did not go to the extent that the US did in Venezuela, the former flexed its muscles in Taiwan, and South China Sea.

Despite the adverse impact on its economy, Russia, another newborn rival of the US, has survived the turmoil due to the western sanctions on its oil exports, and frozen assets across the globe. It may be winning the Ukraine war despite the early setbacks. The West, or some of the backers, are losing interest in the prolonged war. Russia used smuggling routes, and old ships to transport the oil to the buyers. India and China became heavily dependent on Russian imports. This irked Trump, who took on India, and dealt with China gingerly. The truth is that Russia will not give in easily.

Hence, as America pushes to gain more control over oil production, and global supplies, Russia and China will counter its moves. This rivalry will not be won easily as the communist allies, unlike the Axis Powers (Germany-Japan), have the oil, and market. Both Russia and China have access to other sources, and markets. In the end, Trump’s ideology may remain limited to business. He may not wish to control the oil market, but merely push more American oil, and force buyers to switch from Russia to the US. It may be a limited-strategy war. Let us see who will be Trump’s next target?

The author has worked for leading media houses, authored two books, and is now Executive Director, C Voter Foundation; views are personal