IntroductionAmerican warships are already off thecoast of Venezuela. Trump speaks of narcotrafficking, but is that really thewhole story? Let’s break down what’s behind these maneuvers — and why oil isonce again carrying a risk premium.Why Venezuela?Venezuela holds the world’s largestproven oil reserves — more than 300 billion barrels, surpassing even SaudiArabia. Yet its state oil company PDVSA has been crippled by years ofmismanagement, corruption, and US sanctions, leaving production stuck around500,000 barrels per day — a fraction of its potential.Still, Venezuela remains a crucial playerfor global flows. China has become one of its biggest customers, keepingMaduro’s regime afloat, bypassing sanctions with disguised shipments and barterdeals. This connection ties Caracas directly to Beijing’s energy security — andgives Washington one more reason to turn Venezuela into a pressure point.Rubio and the military escalationThe first strike came from US Secretaryof State Marco Rubio. The State Department calls Nicolás Maduro an illegitimatepresident and the leader of the “Cartel of the Suns,” responsible fornarcotrafficking into the US and Europe. In August, Washington raised thebounty for his arrest to $50 million, while the White House openly declaredthat “any element of American military power” could be used against Caracas.In response, Maduro announced amobilization and deployed around 15,000 troops to the Colombian border. At thesame time, US warships approached Venezuela’s shores, officially under thebanner of a counternarcotics operation. Caracas appealed to the UN and itsallies, calling for protection against American aggression.Exxon vs. Venezuela — a long warThe conflict between Washington andCaracas is not just about narcotrafficking. At its core lies oil. ExxonMobilhas been at odds with Venezuela for decades: the nationalization of its assetsunder Chávez, multi-billion-dollar lawsuits in international courts, andblocked investments.In 2015, Caracas declared disputedoffshore waters as its own, including the Essequibo region claimed by Guyana.Yet it was precisely there that Exxon secured a license from Guyana to developthe giant Stabroek field.Since then, Exxon has become one of theregime’s primary irritants. Its survey vessels clashed with Venezuelan navypatrols, including a 2018 incident. Every new drilling step triggered Caracas’sprotests — right up to its latest statements in 2025 against the launch of newFPSOs. For Exxon, Maduro’s removal would mean not only revenge, but directaccess to billions of barrels in disputed waters. Production is alreadyunderway under Guyana’s and Washington’s protection, but the case remains underreview at the International Court of Justice.Trump and Exxon — interests alignFor Donald Trump, ExxonMobil is not justanother oil major. It has long been a political patron of the Republicanestablishment, pouring millions into campaign coffers and shaping Washington’senergy agenda. Exxon embodies the very idea of “American energy dominance” thatTrump turned into a slogan during his first term.The company’s feud with Venezuela ispersonal: its assets were seized during Chávez’s nationalizations, it foughtbillion-dollar battles in arbitration courts, and it has been locked out of theworld’s largest oil reserves for over a decade. An ouster of Nicolás Madurowould flip the script. Exxon would gain direct leverage over disputed offshorefields through Guyana’s licenses, while Washington could finally re-anchorVenezuela in the Western energy order — pushing out Chinese buyers who havebeen propping up Caracas with sanctions-busting deals.For Trump, aligning with Exxon is morethan corporate loyalty. It means rewarding an ally, cutting Beijing off fromcheap crude, and proving that American gunboat diplomacy still works whenmarkets are at stake.How markets react if thesituation escalatesFor now, Venezuela is only adding amodest risk premium. Brent has been trading with an extra $2–3 a barrel builtinto prices, reflecting the threat of disruption. That’s manageable.But the market calculus changes themoment talk of a US special operation turns into action. A full-scaleintervention would not just freeze Venezuelan exports — it would destabilizethe wider Caribbean basin and raise questions about flows from Guyana, which isramping up to over 1 million barrels per day by 2027. In that scenario, traderswould start pricing in a geopolitical shock: a $10–15 spike in Brent isrealistic within days, pushing prices toward the $80 handle.Brent is tightening into a breakout. The$66 trendline is holding like concrete — as long as it stays intact, the biasis higher. The nearest resistance sits at $70-71. If that level cracks,especially under the headline of a US strike or “special operation,” the marketwill flip from cautious to outright momentum. In that case, $79–80 is not justa target — it’s the natural magnet. And if fear really spills over, theextension points to $83+.Europe would feel it in inflation, China inindustrial costs, and the US shale patch — along with Exxon — would stand togain. For markets, the real question is not whether Venezuela matters, but howfast risk turns into price action once the first shot is fired.ConclusionVenezuela is no longer just a failingpetrostate on the periphery. With US warships on its doorstep, Rubio putting a$50 million price tag on Maduro, and Exxon eyeing a return to the world’sbiggest oil reserves, the stakes have shifted. This is no longer aboutnarcotrafficking — it’s about who controls the flow of crude in the WesternHemisphere.For traders, the setup is simple: thechart is coiled, the politics are explosive, and the first headline thatconfirms military action could turn a slow market into a $10–15 melt-up. Foreveryone else — from Brussels to Beijing— it’s another reminder that oilremains the ultimate weapon of geopolitics. This article was written by IL Contributors at investinglive.com.