U.S. Does The Unthinkable To Reverse Petrodollar Collapse _ Control Global Oil Supply

Alright guys, so something big just happened in the past 24 hours. And it's time we pay more attention to the Western Hemisphere. The US is really hammering down on Venezuela. We could be on the brink of some sort of military action. Now, it's well known that Trump doesn't like Maduro's government. Yes, the reason given to the world is about the cartels, but the reason goes deeper than that. US foreign policy is littered with too many examples of regime changes, or at least attempted regime changes. Now, this doesn't smell good at all. Trump has declared to the world all airlines to consider Venezuela's airspace to be closed in its entirety. You don't make such declarations unless something big is going to go down. This is never just theatre. Even if it's a threat, he has gone too far. And operations of sorts is probably being prepared that we just don't know about just yet. This is most definitely a flex of the US military, which is still far superior in the Western Hemisphere. It's also a big reminder to Latin America of who is in charge. So there is an element of geopolitical warning here. US footprint in Latin America is not going to disappear. And Trump knows Venezuela's own forces can't possibly stand up against the US long term. And this is a desperate move by the United States. According to reports, US forces have been amassing in the region. US warships carrying fighter jets are patrolling the Caribbean Sea. In addition to that, Trump has hinted on potential US land operations in the country. So brace for impact. Perhaps the decision has already been made. There have been many excellent analysis on the cartel aspect of this mess, so I don't want to repeat that. But I want to dive deeper into the economic aspects and why I believe is the real reason behind this massive threat. It's a consolidation of power. Ladies and gents, it's all about the oil and the US maintaining a tight grip on the region. Now the Colombian president mentioned how oil is at the center of Trump's campaign on Venezuela. He says it's a negotiation about oil, which means the US wants some sort of control and say over Maduro's oil production. And this isn't a big stretch because the US desperately needs inflation to come down. And the biggest driver of higher CPI has been energy prices. Inflation has creeped back over 3% over the past few months because of it. President himself has hinted that Venezuela has a part to play with this. Global energy prices have to come down to save the US economy. And I think there's a very good chance that if something happens with Russia, Ukraine, if something happens down in Venezuela, that we could really see oil prices go down even more. And oil and gasoline prices are down substantially under President Trump. And that is really the key to affordability is lower energy. Now did he just say the quiet part out loud? We need to fit the jigsaw pieces together guys. The US needs to lower interest rates as fast as possible. And that way the shell game can continue humming along, especially in AI. But to justify the cut, inflation can't accelerate. That is why Besen has been on TV denying its existence. It's probably why the US is intimidating Venezuela today. Venezuela exports only around 800,000 barrels per day. It's under 1% of total world oil consumption. The country is under heavy sanctions and the oil industry there is truly in tatters, especially when you compare them to the big boys like Russia or Saudi Arabia. It was Trump's own sanctions during his first term that caused the downfall of the oil sector. Production literally collapsed and that took away a huge amount of supply from the world. Hindsight tells us that this action has ultimately backfired, especially during the trade war period. Tariffs are raising the cost of living and the last thing you need is for higher energy prices to drag on. What the US probably wants is control to rebuild and bump up oil production in Venezuela. But with a big caveat, it will likely be under US orders and direction. This is how much you can produce and this is who you can sell to. And most importantly, sell your oil using only US dollars. Don't try any funny business like selling in Euros or the Chinese RMB. The potential of Venezuelan oil is tremendous and Trump definitely wants control. Now look at the disparity between their crude oil reserves and exports. The country has over 300 billion barrels worth of reserves. That's more than Iran, Canada or even Saudi Arabia. It's almost six times more than the US. However, because of the sanctions, they only export less than $4 billion worth. If this production ramps up, this will flood global markets with millions of barrels a day. Higher supply would mean lower prices around the world and there would most definitely drop energy inflation especially in the US, aka a better argument for the Fed and Trump to cut interest rates. So I hope the puzzle is starting to fit here. By controlling oil production, the US can influence the world's biggest reserves and how transactions are also being made. This is also a big battle to protect what's left of the petrodollar system. Who do you think is the biggest buyer of Venezuelan crude? It's none other than China and volumes have been increasing like never before. Around 84% of total exports from the country went to Chinese buyers directly or indirectly. Beijing is enjoying cheap energy from Maduro. They are probably the only buyer in the world that can resist US sanctions with no pushback. Most definitely the Chinese are paying for the oil in the RMB, their local currency. They aren't using dollars, at least not for the majority of payments. This is a threat to the entire petrodollar system. However, Trump can't possibly punish China directly. If he tries to sanction Chinese banks, the global financial system will plunge into chaos tomorrow. And if he tries to ramp up the tariffs, China will strike back. Beijing will simply restrict rare earths again. To his trap, any financial moves will not work at this point. And that's why going to the source might be the only solution left. Trying to get control and dictate the terms of the buying and selling of the oil. The military buildup in the Caribbean is likely more than just fighting the cartels. It's about oil. Around half of Venezuelan oil production is controlled by foreign companies. Nearly 18% by Russia and China. The US through Chevron controls around 23% of production. But the vast majority is still under the state-owned oil company, PDVSA. Because of the sanctions, very few foreign companies want to come in and develop the fields. Through sanctions and restrictions, the US will be able to command how the oil is being sold. Use only dollars and not the Chinese RMB or any other currency for that matter. At this point, the US is probably going to try to impose their will. I don't see any other way of things playing out because the stakes are just too high. The consolidation of power in the Western Hemisphere is not going to stop. There might not be an invasion and the probability is very low. And it would cause a short-term spike in oil prices as well. But one can expect tough negotiations between Maduro and Trump. The new US FTO designation in Venezuela is squeezing oil production even further. Oil companies in the country could be facing punishments by just using the ports essential to oil operations. It's a big blanket rule that will scare companies from expanding. New entities coming in will also be heavily discouraged. So the pressure from the US on Maduro is multifaceted. It's coming from both the military and American sanctions that target oil production. Control is a clear objective and countering denarisation is definitely part of the agenda as well. It's on the menu. But can Trump succeed? The real blockers here aren't really the Venezuelan army. It's the presence of China and Russia in the region. Now both countries are going to protect their interests in the country as well. Russia, for example, has issued a statement that the country is a partner and ally of Russia. It's a tacit statement of Moscow's support in the event of things getting really nasty. We can expect Russian intelligence and even weapons to balance the odds if the US really does go in. Then things could really get nasty and crazy then. Now China themselves also has a lot to lose financially. For decades, even before the first US sanction on the country, China has been supporting Venezuela from the ground up. They are part of the Chinese Belt Road Initiative and should things escalate to an armed conflict, a lot of Chinese investments could literally evaporate in a cloud of black smoke. Between 2005 and 2015, Chinese state-owned companies poured in nearly $3 billion into the country and a lot of it revolves around the energy sector. State-owned Chinese banks are also exposed. They have provided over $62 billion in loans to Venezuela. And once again, the majority of the money has gone into the energy sector, into power projects. China don't want to see their hard-earned money get blasted into oblivion. One can expect tough talks with the US and there's always the lever of rare-earth export controls. There's also the multipolar world looking at the events, especially Latin America and BRICS countries like Brazil. If an invasion does happen, we can expect the majority of the bloc and South America to basically condemn it. The US probably understands this. The Chinese economy will be the biggest beneficiary, even if they lose their oil supply for Maduro. Despite the pandemic and the Tenth War, China's exports and trade surplus just keeps growing. Almost every year, it has been rising more and more. If an invasion happens, oil infrastructure will get damaged and we might be in a mini oil shock. Global supply of crude will take a hit and the US themselves will be consuming a lot of energy to wage a new war. Now suddenly, prices of everything around the world goes up and inflation rebounds. Where will consumers run to? They will run to Chinese goods because of the price disparity. The cost savings will be even larger than today. China's trade surplus will grow even larger and this will boomerang back on US exporters, industries and the economy. There's very little short-term and very little long-term rewards for Trump to really go in. For what we can expect is the US to force more oil concessions from Venezuela. They want more barrels of crude into the market but sold under certain restrictions to be sure. Now during the campaign trail, Trump already expressed how important Venezuelan oil is. Very bizarre comments here. He seems to be joking or is he really joking? Now with Trump, you never know anymore. Now will he get his way? It's going to be a tough sell. The US going in would be a tremendous financial and geopolitical mistake. It would just spur the world to break away from everything US. This includes exports, trade agreements and even currency reserves like US bonds. In contrast, we will see BRICS membership grow even more in 2026 and beyond. And I hope the conflict doesn't escalate for everyone's sake. But if it does, the mistake could be even more severe than a tariff war launched on Liberation Day. The sky will fall on US influence, its economy and ultimately, the sky will fall on the dollar itself. But let me know what you think. Will the US go into Venezuela? Or is this all blaster and bravado from Trump? Let me know in the comments below. Stay safe. Be sure to smash the like button and subscribe as we navigate through these crazy times.