How New Venezuela President Will Save Us from Trump’s Crazy
The Radical Pragmatist versus Rubio’s Vulture
Trump aims to drop oil to $50 a barrel; Chavez offered that years ago.
The US press is confused. Nothing new there. They are confused about the Acting President of Venezuela, Delcy Rodriguez.
The New York Times says Rodriguez “Went From Revolutionary to Trump’s Orbit”
Oh no, she didn’t.
Rodriguez still attacks Trump as an outlaw kidnapper and imperialist invader. But, at the same time, she says she’s seeking the restoration of diplomatic relations with the US and offers tens of millions of barrels of oil to Trump.
I’ve known Rodriguez for years. Is she a militant Leftist or a moderate pragmatist?
The answer is, “Yes.” I’d call Rodriguez a “radical pragmatist.”
Trump is wise to keep Rodriguez in the Presidential office. Did I just associate “Trump” and “wise”? Yes, but it seems Trump’s wisdom may be accidental. He is reported to be furious at the leader of the Venezuelan opposition, Maria Corina Machado, for accepting the Nobel Peace Prize instead of leaving it to Trump. And the result is that he has vetoed installing her in power.
Notably, oil and finance interests want the “Leftist” Rodriguez to stay — even the CIA wants her to stay. But Sec. of State Marco Rubio and an outlaw US billionaire want her out. Who wins? I’ll handicap the race below.
Trump wants Venezuelan oil — that we already had
Rodriguez and Trump desire the same thing: to send Venezuelan oil to the US. But Donald, we already had Venezuelan oil…until YOU embargoed imports of their crude.
Venezuela’s socialist President Hugo Chavez enjoyed taunting George W. Bush. I remember when Chavez spoke at the UN General Assembly right after Bush left the podium. Chavez began, “There is a distinct smell of sulphur here.” Bush went after Chavez. It was a bit less subtle than Chavez’ comment. Bush backed the kidnapping of Chavez in 2002. Unlike Trump, Bush’s scheme face-planted and Chavez was returned by his kidnappers, more popular than ever.
But despite the barbs and kidnapping, Bush, with Chavez’ encouragement, kept Venezuelan oil flowing to the US, more than a million barrels a day.
Trump is crowing that, “we’re going to be taking oil” from Venezuela. Mr. President, we were taking Venezuela’s oil until you stopped the flow with an embargo.
Now, it will be nearly impossible, and cost a prohibitive amount, to crank up Venezuela’s production to get back up to the flow quantities we had before Trump’s embargo. Because, when the extraction of super-heavy oil of Venezuela stopped, it congealed into tar and then into asphalt. Refineries and pipes are choked and destroyed, a destruction Trump engineered through blocking Venezuela from paying for equipment to maintain the lines. Now, Trump is trying to bully US oil companies to invest as much as $100 billion to restore the oil infrastructure that Trump himself destroyed.
Trump wants praise for (expensively) rebuilding what he demolished. He’s like an arsonist who wants praise for calling the fire department.
Watch the film of my BBC reports, The Assassination of Hugo Chavez, produced with Oscar-nominated cinematographer Richard Rowley.
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Chavez’ $50/barrel offer
US voters have decided that price inflation is a real bummer. So, Trump has decided, correctly, that unleashing Venezuela’s oil is the way to go. Trump states bluntly that he wants to open Venezuela’s oil spigots to bring down the price of crude to $50 a barrel. Today, crude sells for just under $60/bbl.
But Venezuela already offered to cap the price of its oil at $50/bbl years ago. In one of my interviews with Chavez for BBC Television, he said he would agree to cap oil at $50 if the US would guarantee that oil would not slip below $30/bbl. Venezuela, unlike Saudi Arabia, could not afford another crash to $10 a barrel, as happened in 1998, which bankrupted South American OPEC members. So, Chavez enthusiastically endorsed this idea of a “band” — you give us a bottom and we’ll give you a top — which was first suggested, notably, by industry consultant Henry Kissinger.
Chavez told me he got along well with Kissinger and George Bush Sr., a fellow oil man. And, as Chavez noted, he was “a good chess player,” a pro at realpolitik, a skill he passed to his protégé Rodriguez.
In other words, Trump killed a hundred people in his coup (and thousands may yet die) to get something by force that he could have gotten by contract.
OPEC: “no brainer” or “no brains”?
The first strike against right-wing fave Machado is her avowed desire to sell off Venezuela’s state oil company, Petroleos de Venezuela, S.A. (PdVSA, pronounced, Pay-day-VAY-sah). What Machado, a neophyte to petroleum economics, does not understand is that full privatization is a direct threat to the oil majors and OPEC.
I’ve seen this movie before. Leading up to the invasion of Iraq, neo-cons within the Bush Administration wanted to privatize Iraq’s state oil companies, selling the fields to American and European majors who would then, the neo-con plan went, compete to maximize output, crash the price of crude and bring OPEC to its knees. Ari Cohen of the Heritage Foundation told me this scheme was a “no-brainer.”
But then I spoke with Philip Carrol, past President of Royal Dutch Shell USA who said, “Anyone who thinks pulling out of OPEC is a ‘no brainer’ has no brains.” Oil companies are not in the business of getting oil; they are in the business of making money. A crash in the price of crude could indeed end OPEC’s price-setting power and no US oil company wants to see their revenues collapse.
There’s also a legal issue. There is no way for Venezuela to stay in OPEC if its state oil company is sold to US interests because US law makes it a crime to participate in a price-fixing cartel. But our government has carved out a convenient exception for state-owned oil companies allowing Exxon and Chevron and their buds to surf on the high prices set by the OPEC monopoly.
Rodriguez is not only Acting President, she remains the Minister of Petroleum and Hydrocarbons. She has a detailed knowledge of the hard realities of oil production. But, she’s a patriot, too. She will not allow the theft or seizure of Venezuela’s oil, but she sure as hell wants to sell us oil again. Chevron, which has worked closely with
Rodriguez, couldn’t be happier. Oil companies don’t want to own oil fields. That’s not how the industry operates. They don’t want the real estate; they want profit. They work with OPEC nations through PSA’s, Profit Sharing Agreements. The issue is always the split of the revenues, not ownership; with the state’s share paid as a “royalty” for US tax purposes.
The last thing the oil companies need is Machado, a free-market fanatic, creating a civil war over ownership of fields that the majors want to drill, not own.
And there’s a practical problem. At $50/bbl, no one is going to drill in the Orinoco Basin, where most of the oil is, because it’s just not profitable to try and pull up the sulphurous gunk there. As petroleum engineer Beck would say, “It’s a loser, baby.” That’s why Trump was so frustrated with the oil big wigs who just met with him at the White House. He’s telling them to dump tens of billions into a money pit, rebuilding what Trump destroyed.
Rodriguez well understands the practical limits of control. Chavez was known for hiking oil royalties on Exxon, Chevron and France’s Total but his then-minister for oil told me, quietly, “That if they invest in our country, then we forgive the new royalty.”
“The Vulture” swoops in
So who would want to privatize PdVSA? The Vulture, that’s who. I’ve been tracking this bird, Paul Elliott Singer, for nearly two decades, first for the BBC. Bloomberg low-balls his net worth at $6.7 billion. (He’s been known as The Vulture since this reporter gave him the name. You could say he’s no fan and tried to get the network to fire me.)
Singer is an international re-po man, buying up the debts of nations busted by wars, famines and cholera. An Obama official called him an “extortionist” after Singer got away with ripping off the US taxpayer for billions.
Singer’s trick is to buy up defaulted debts of desperate nations and distressed companies. Then he’ll sue for ten times, or even a hundred times, what he paid for these debt securities, a brutal business outlawed in several nations. You may remember the signs from Argentine fans at the 2014 World Cup , “IFuera Buitres!” (“Vultures Out!”), referring to a Singer-led re-po attack that brought Argentina to its knees.
In 2018, a Maryland court tentatively approved Singer’s Elliott Management’s purchase of PdVSA’s US subsidiary, CITGO. Singer plans to pay peanuts — just $5.9 billion for Venezuela’s US property which is valued at $11 billion to $18 billion. As you can imagine, Venezuela objects.
The low price for CITGO is based on its devaluation because of the Trump embargo. But since Maduro’s kidnapping, it’s all but certain that the embargo will end. If Singer can close the sale, he could cash in and quickly flip these assets for an easy $6+ billion profit.
But, Rodriguez wants CITGO back. Her nation paid for those refineries and gas stations and it’s hard to see how she’d let Singer waltz off with her peoples’ property.
The judge understands that CITGO’s valuation is changing, probably tripling in value because the US is negotiating the restoration of diplomatic ties. So, the judge asked the US State Department to file a statement with the court on how the change of government in Venezuela changes the commercial value of CITGO. The comment was
due from the State Department on January 8. But the court got nothing — nada, zero.
How come the State Department didn’t respond to the court, leaving Singer’s windfall uncontested? How could Singer get away with this? It should be “who” is letting Singer get away with this?
Singer was the overwhelming Number One donor to the Presidential campaign of Marco Rubio, now our Secretary of State and National Security Advisor. Trump used to attack the “Never-Trump” Singer — until Singer made a million-dollar donation to Trump’s inaugural committee. Singer is also funding a primary against Rep. Thomas Massie, the Republican Congressman who demanded the release of the Epstein files.
Rubio was huffing-and-puffing to get Trump to install Machado whose affection for privatization would have helped Singer to cash in. Whether Singer’s creepy greed, Rubio’s silence, and Machado’s willingness to give up her nation’s crown jewels are related, “¿Quién sabe?” Unlike Pete Hegseth, Rubio doesn’t invite journalists on his
conference calls.
But while the State Department did not respond to the judge, Trump went over Rubio’s head and issued an Executive Order over this past weekend using his power under the Constitution to stop any court action that impedes the Executive Branch’s sole authority to conduct foreign affairs. In a stunning move, Trump barred US oil majors and other creditors from grabbing Venezuela’s cash reserves still held in US banks. Trump’s order is a bit of a mess (no news there), but it is a clear and present danger to The Vulture’s smash and grab of CITGO.
Indeed, Trump told oil companies to stick it. In their confab with Trump, ConocoPhillips bitched that it was owed $12 billion and Trump blamed the company for its loss, “We’re not going to look at what people lost in the past because that was their fault.” (Which it was.)
Trump’s even suggesting he’ll bar ExxonMobil from returning to Venezuela because they are demanding compensation for properties the company abandoned. (When Exxon left Venezuela it was an attempt to pressure Chavez into dropping his royalty demands. That failed. Now, I suspect, Exxon is miffed that Chevron will cash in big-time under Rodriguez. Exxon is like the guy who gives up girlfriend then gets jealous when she cuddles up to a rival.)
“Call of Duty,” the CIA and “good” vultures
A week after the attack on Venezuela, Pope Leo went full Pontiff-for-Peace on Trump, decrying “diplomacy based on force.” Take that, Stephen Miller!
Singer is not normal. Not every financier wants to chew on Venezuela’s corpse. Hans Humes of Greylock Capital Management, whom one of my colleagues calls, “the ‘good’ vulture,” likes to cut deals with foreign governments that won’t bankrupt their nations nor cart off their resources. I know Humes. He fears civil war in Venezuela or “any kind of breakdown of social order” which would make his bonds worthless.
I can tell you that both sides in Venezuela are armed to the teeth. If Rubio succeeds in getting Trump to reverse his position and shove Machado down Venezuelans’ throat, it will be Iraq 2.0. Then no one gets the oil, no debts get paid. The Wall Street Journal quotes Eric Fine, whose firm also owns Venezuelan bonds, “The last thing you want to see is a ‘Call of Duty’ scenario with a bunch of soldiers in the streets.”
Trump has been down this dark alley before. In 2019, he went along with then-Senator Marco Rubio’s hare-brained scheme to declare Juan Guaido as President of Venezuela. Guaido is a white guy who lived in Washington, not Venezuela, and never even ran for President. Trump has made clear he’d been burned with Guaidó, and dismissed him as a loser. Trump has said he thinks of Machado as another Guiado. He said, “She doesn’t have the support within, or the respect within, the country. She’s a very nice woman, but she doesn’t have the respect.” Ouch!
That’s also the position of CIA. In a leaked memo, the Agency said that Rodriguez was more likely to hold the country together during a transition. Also, while she he gave a thundering speech against Trump’s gunboat diplomacy — “Never again will we be slaves, never again will we be a colony of any empire” — she also said, “We are open to energy relationships where all parties benefit, where cooperation is clearly defined in a commercial agreement.”
That had to be music to Trump’s ears, though not Rubio’s. Rodriguez, the 56-year-old Sorbonne-trained lawyer and former diplomat in London, is expert at the Art of the Deal. And, unlike the former bus-driver Maduro, she can make her case convincingly in flawless English, French and erudite Castilian.
Acting President Rodriguez knows, it’s about the oil. Always the oil. She said, “All the lies about ‘drug trafficking’, ‘democracy’, ‘human rights’. They were the excuses. It was always about the oil.” And Minister for Petroleum Rodriguez, the radical pragmatist, knows that is how she will artfully cut her deal.
Because she knows that Venezuelans can’t drink their oil; that her nation needs American majors to buy her nation’s output and for the industry to rebuild their former production lines. Darren Woods, the cranky CEO of ExxonMobil told Trump that Venezuela would be “uninvestible” unless there is political stability. Rodriguez can provide that.
But while the oil boys were talking about the need for stability in Venezuela, there was a sly message directed at Trump. Given our president’s quixotic policies — from tariffs to taxes to military adventures — that the majors don’t want to gamble billions unless there is a stable government in the USA.
Watch Palast discussing this report with Thom Hartmann on YouTube or Substack.
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Assuming it's in trump's best interest to maintain the current Venezuelan regime, what was the point of the controversial military operations and abduction of Maduro? Why couldn't the US offer to lift the embargo if Rodriquez were given authority over the oil negotations or otherwise sidelining Maduro in some respects?