Why the Venezuelan Invasion Interests Nvidia More than Exxon*
Critical minerals and the race for 21st century infrastructure also factor into Donald Trump’s pirate calculation. A 16-kilometer (approximately 10-mile) gas pipeline would transform the Caribbean into an American energy hub in a fraction of the time that oil requires.
History teaches us that, under the ruthless rule of empires, sovereignty of the weak lasts until their wealth becomes necessary. It appears that Donald Trump has not read history. He invaded Venezuela with the stated objective of stealing the country’s oil, as if it were still 1973.
Venezuela has the largest and the worst quality oil reserves in the world: 303 billion barrels, extra heavy, expensive to extract and refine. The infrastructure is in ruins, with 50-year-old pipelines that have not been maintained. It would cost $110 billion and take five to seven years to return to the levels of the 1990s, and until yesterday, the consensus was that oil would be dead before 2040. When oil companies were consulted on the evening of the invasion, they refused to operate in Venezuela.** Who would have thought?
Trump has three more years in office. The return on investment takes twice as long and will force the bet to adopt his successor’s foreign policy and the future passivity of a country that remains Bolivarian until further notice. To make matters worse, Venezuelan crude oil is sold at a discount to Brent crude, which reaches 34% of its value before any profit.
On Tuesday, Jan. 6, Trump announced that Venezuela would be “turning over between 30 to 50 million barrels of high-quality oil” to the United States “and that money will be controlled by me.” That equates to 2 1/2 days of demand. The numbers don’t add up.
Oil matters, but not only in this way. Cutting off the flow from China, which buys 76% of Venezuelan exports, and suffocating Cuba are the real objectives. Beijing, which wants Taiwan, publicly protests, but takes note of precedent. Critical minerals and gas provide the push that’s missing.
In December 2024, China banned the exportation of gallium, germanium and antimony to the U.S., minerals that are essential for semiconductors. Four months later, it added seven rare earth elements, leading Americans to back down from the tariff war.
One month ago, the Trump administration launched the Pax Silica Initiative to secure these supply chains, the Achilles’ heel of AI geopolitics. Venezuela has coltan, gold, bauxite and reserves of rare earth that have not yet been mapped. They are concentrated in the Orinoco Mining Arc, which possesses 300 million tons of these minerals, actually exploited by illegal miners and Chinese buyers. The U.S. commerce secretary was direct. “You have all the critical minerals … They have a great mining history that’s gone rusty … [Trump] is going to fix it."
On Monday, Chevron shares rose 5% with the promise of rebuilding the oil industry and USA Rare Earth's shares soared 14%, betting that the change in Venezuela’s president will open access to Venezuelan neodymium, raw material for the magnets that the company will produce in Oklahoma starting this year. The connection with Greenland is obvious: Trump threatened to invade it the day after the capture of Maduro. Timing is everything.
The same rationale applies to natural gas: American data centers must triple their consumption of energy by 2030, with gas responsible for 40% of the mix. Venezuela has 200 trillion cubic feet that has not been exported. A 16-kilometer (approximately 10-mile) gas line would connect the Dragon field to the GNL terminal in Trinidad, transforming the Caribbean into an American energetic hub in 18 months, a fraction of time that oil requires.
Trump speaks about oi because his public adores it. But the bet is also on the infrastructure of the future.
*Editor's note: This article is available in its original language with a paid subscription.
**Editor’s note: Information about whether and or when Trump consulted with oil companies about action recent U.S. action in Venezuela has not been verified.
History teaches us that, under the ruthless rule of empires, sovereignty of the weak lasts until their wealth becomes necessary. It appears that Donald Trump has not read history. He invaded Venezuela with the stated objective of stealing the country’s oil, as if it were still 1973.
Venezuela has the largest and the worst quality oil reserves in the world: 303 billion barrels, extra heavy, expensive to extract and refine. The infrastructure is in ruins, with 50-year-old pipelines that have not been maintained. It would cost $110 billion and take five to seven years to return to the levels of the 1990s, and until yesterday, the consensus was that oil would be dead before 2040. When oil companies were consulted on the evening of the invasion, they refused to operate in Venezuela.** Who would have thought?
Trump has three more years in office. The return on investment takes twice as long and will force the bet to adopt his successor’s foreign policy and the future passivity of a country that remains Bolivarian until further notice. To make matters worse, Venezuelan crude oil is sold at a discount to Brent crude, which reaches 34% of its value before any profit.
On Tuesday, Jan. 6, Trump announced that Venezuela would be “turning over between 30 to 50 million barrels of high-quality oil” to the United States “and that money will be controlled by me.” That equates to 2 1/2 days of demand. The numbers don’t add up.
Oil matters, but not only in this way. Cutting off the flow from China, which buys 76% of Venezuelan exports, and suffocating Cuba are the real objectives. Beijing, which wants Taiwan, publicly protests, but takes note of precedent. Critical minerals and gas provide the push that’s missing.
In December 2024, China banned the exportation of gallium, germanium and antimony to the U.S., minerals that are essential for semiconductors. Four months later, it added seven rare earth elements, leading Americans to back down from the tariff war.
One month ago, the Trump administration launched the Pax Silica Initiative to secure these supply chains, the Achilles’ heel of AI geopolitics. Venezuela has coltan, gold, bauxite and reserves of rare earth that have not yet been mapped. They are concentrated in the Orinoco Mining Arc, which possesses 300 million tons of these minerals, actually exploited by illegal miners and Chinese buyers. The U.S. commerce secretary was direct. “You have all the critical minerals … They have a great mining history that’s gone rusty … [Trump] is going to fix it."
On Monday, Chevron shares rose 5% with the promise of rebuilding the oil industry and USA Rare Earth's shares soared 14%, betting that the change in Venezuela’s president will open access to Venezuelan neodymium, raw material for the magnets that the company will produce in Oklahoma starting this year. The connection with Greenland is obvious: Trump threatened to invade it the day after the capture of Maduro. Timing is everything.
The same rationale applies to natural gas: American data centers must triple their consumption of energy by 2030, with gas responsible for 40% of the mix. Venezuela has 200 trillion cubic feet that has not been exported. A 16-kilometer (approximately 10-mile) gas line would connect the Dragon field to the GNL terminal in Trinidad, transforming the Caribbean into an American energetic hub in 18 months, a fraction of time that oil requires.
Trump speaks about oi because his public adores it. But the bet is also on the infrastructure of the future.
*Editor's note: This article is available in its original language with a paid subscription.
**Editor’s note: Information about whether and or when Trump consulted with oil companies about action recent U.S. action in Venezuela has not been verified.
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