kakshop.onlineOil is US president’s motivation but his concept of economic success feels as outdated as his music tastes
The word “loot” entered the English language from Hindi in the late 18th century, as the rapacious East India Company plundered its way across the subcontinent.
It was a trading company, not a state – but it had the imprimatur of the English crown and its own large private army, mingling commerce and military force and opening the way for British imperial dominance of India.
Donald Trump’s dead-of-night raid on Venezuela last week was the act of a government, not a corporation. But it harked back to a more brazen age, when looting a continent for its resources at the point of a cannon was regarded as a legitimate activity for an English gentleman.
The US president made no effort to disguise the fact that the main motivation for the snatching of Nicolás Maduro was taking control of Venezuelan oil reserves on behalf of the fossil fuel companies that helped bankroll Trump’s re-election.
Trump had already wielded US economic power particularly blatantly in trade negotiations over the first 12 months of his second term, using the threat of tariffs to bully and cajole rivals and supposed allies alike – including the UK.
Last weekend’s events made clear he was also prepared to seize resources using military force, apparently with the intention of allowing favoured corporate allies (oligarchs, as we would call them in a Russian context) to exploit them.
It sets a deeply alarming precedent, in terms of what Trump himself may feel emboldened to do, with a string of other targets apparently in his sights, and what rival powers even less concerned about international law could now venture, in pursuit of economic dominance.
Just as Trump’s music tastes are stuck in the days of his youth – he still likes a boogie to YMCA – his conception of what factors make the US economically successful feels hopelessly outdated.
The global oil market is already well supplied, and the US has anyway become a significant net exporter since the shale boom, insulating its economy from the global energy price rises that hit Europe hard after the Russia’s full-scale invasion of Ukraine.
There are some concerns about whether US hard-to-extract shale oil is economic at the current, relatively low oil price of less than $60 (£44) a barrel for the US West Texas Intermediate benchmark, however. Yet Trump appears to want to drive that price lower.
He is unlikely to succeed any time soon anyway: Venezuelan oil is heavy, making it expensive to produce and refine; and analysts believe it will take many years, and billions of dollars, to increase output significantly.
As the Washington-based Institute of International Finance put it last week: “While medium- to long-term upside to Venezuelan supply exists, the balance of risks points to a gradual and conditional recovery rather than swift normalisation, with the potential for renewed setbacks if political or policy frictions intensify.”
Instead of oil, the resource bottlenecks that most concern today’s corporations are in the raw materials required for the mass electrification of energy, as the world shifts to net zero (something Trump rejects, of course) – copper, aluminiumand lithium – not to mention staple foods such as cocoa and coffee, of which prices have been jacked up by global heating.
