The US invasion of Venezuela isn't just about oil... 💰

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When the US invaded Venezuela, oil was the obvious explanation. But experts say the stakes run deeper than access to reserves.

Since the 1970s, the petrodollar system — cemented under Nixon — has helped anchor global oil trade to the US dollar.

But as rivals explore alternatives to the dollar, Venezuela's vast reserves sit at the centre of a wider struggle over monetary power.

FEATURED STORY

What Latin America's press misses about Venezuela

Natalie Alcoba

"We don't need Venezuela's oil. We have plenty of oil in the United States," the US secretary of state, Marco Rubio, told an NBC interviewer the day after US troops snatched Nicolas Maduro from Caracas last month.

"What we're not going to allow is for the oil industry in Venezuela to be controlled by adversaries of the United States," Rubio added, going on to name the US's list of usual suspects: China, Russia, Iran. "They're not even in this continent; this is the Western Hemisphere. This is where we live."

While it is indeed unlikely that Donald Trump's invasion of Venezuela was intended solely to open up access to the country's deep oil reserves for American companies, the oil factor speaks to broader forces that are also at play. Specifically, experts openDemocracy spoke with pointed to oil's role in weakening the US dollar's position as the financial instrument of choice on the international stage, which is in turn reducing the US's global economic dominance.

"We've been saying that it's not just about oil," Emiliano Terán Mantovani, a Venezuelan sociologist who specialises in political and economic ecology at the Universidad Central de Venezuela, told openDemocracy. "The issue that is on the table has to do with systemic change and you have to look at it in an integral way."

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Venezuela occupies an important material and symbolic role in energy economics. Crippled by stiff US sanctions, Maduro's regime was selling the vast majority of its heavy crude to energy-hungry China, most of it traded in the Chinese renminbi, as well as paying off hefty Chinese loans directly with barrels of oil.

Although China imports 74% of its oil and Venezuelan reserves make up just 3% of its total energy imports, this trade represented a glaring carve out in Latin America, a region that Trump has declared his own.

Money is power, and although oil is still the most traded commodity in the world, it is more than just a commodity. For the US, the so-called 'petrodollars' scheme devised by the Richard Nixon administration in the early 1970s, which cemented the price of Saudi Arabia's oil in dollars, brought with it an enormous strategic advantage.

The US dollar was eventually adopted by other nations in the Organization of the Petroleum Exporting Countries, creating a seemingly insatiable demand for the American currency and a steady stream of petrodollars that were reinvested in the US Treasury and the financial market. That influx of capital has helped the US run large deficits and bankroll its mammoth military, a key pillar of its global influence.

But the cracks in US hegemony are showing. Announcing a trade deal with China last month, Canadian prime minister Mark Carney declared the dawn of a "new world order".

"The architecture, the multilateral system that has been developing these, is being eroded," Carney explained, adding: "The evolution of the global financial system, the role of the renminbi over time, the evolution of cross-border payments… These are important elements of how the [new] system's going to work."

This "erosion" can be seen in the fact that for the first time since the 1990s, central banks around the world have more reserves in gold than in US dollars. What's more, the US currency accounted for 56% of central banks' foreign exchange reserves in the first quarter of 2025, down from around 70% in 2000, according to the International Monetary Fund.

As the dollar weakens, there has been an increase in what the IMF calls 'non-traditional reserve currencies'. One of these, the renminbi, had seen gains equivalent to up to a quarter of the dollar's decline, the IMF said in 2024, although it had stalled that year. Xi Jinping vowed this year to turn the renminbi into a "powerful currency" that has a greater role in the international monetary system.

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China is a key driver of the push to de-dollarise, with its own cross-border payment system, swap lines and a central bank digital currency. But it is not alone. Russia trades mostly in rubles and yuans. Heavily sanctioned for human rights violations, Iran sells most of its oil covertly to China via shadow tankers that bypass legal routes. China now settles a third of its trade in yuans, up from 20% in 2022.

So while there are many factors behind the US intervention in Venezuela, it is "part of a general strategy to slow the relative decline, to try to prevent de-dollarisation, and to control the oil supply", according to Gabriel Merino, an Argentine international relations expert who focuses on China. "Maintaining control of global oil is a way to sustain the petrodollar. It's all connected in some way."

Merino sees three fundamental conditions as pushing de-dollarisation. The first is the change in economic clout on the world map. More than half of the world's GDP is now generated through Asia – primarily China and India – increasing the pressure to move away from the US dollar.

The second major factor is BRICS, the economic alliance of countries first established by Brazil, Russia, India, China and South Africa in 2006, but now numbering 11 emerging economies. Virtually since its inception, BRICS has signalled the need to move away from the primacy of the US dollar. So much so that Trump addressed the threat it poses to the US soon after he was elected to a second term as president in 2024, promising 100% tariffs on BRICS countries if they continue that trajectory.

The third factor is the economic war waged by Trump. As the US increasingly attempts to weaponise the dollar through sanctions and tariffs, a backlash has occurred.

Countries such as India and Brazil have developed their own domestic systems that enable customers to receive or make payments in their local currencies and avoid US-based payment methods, such as VISA or Mastercard, with their merchant fees. In December, a pilot project for a BRICS currency and payment system, called UNIT, was unveiled. The digital currency is 40% backed in gold and 60% in member currencies.

Brazil has also included the renminbi in its foreign reserves and devised frameworks to settle trade in the Chinese currency. But researchers say the move reflects a "pragmatic adaptation to shifting global dynamics" aimed at "diversification" rather than "de-dollarisation". Other experts caution against overstating the forces of de-dollarisation.

"The dollar remains the dominant global currency," Mihaela Papa, director of research at the MIT Centre for International Studies, who leads the BRICS Lab, said. Recent data from SWIFT shows the USD is used in more than 50% of the payment service's transactions, by far the largest share. "Current debates around de-dollarisation focus on currency diversification rather than outright replacement," Papa told openDemocracy.

"In practice, this takes the form of dollar risk management, reflected in greater use of local currencies for trade settlement, modest reserve diversification, and experimentation with new payment infrastructures."

Papa believes that for BRICS' efforts to have a significant international impact, cross-border operability needs to scale. The UNIT is at an early stage, so its adoption and success are still unclear, she noted.

And while Trump has made clear his intention to stop BRICS' efforts at de-dollarisation, the factor has not emerged as a clear reason behind the US intervention in Venezuela, said Papa. Rather, it appears driven by a mix of more prominent motivations, including "leverage over oil revenues, regional security and stability, counter-narcotics efforts, migration pressures, and broader geopolitical interests."

The United States upped the ante on its geopolitical interest in Latin America with the Trump corollary of the Monroe Doctrine, a foreign policy issued by President James Monroe in 1823 that lay claim to the Western Hemisphere as the US sphere influence, and closed to further European colonisation. The so-called Donroe Doctrine, issued in late 2025, revives that rationale, leading to comments like the ones made by Marco Rubio the day after the US attack.

"When they talk about the recovering control of the Americas, it's not just about resources. It's also about financial and commercial control," Luca Ferrari, a professor at the National University of Mexico, whose work includes analysing the geopolitics of energy.

China controls the extraction and processing of 90% of minerals, he told openDemocracy. "Its weak point is that it depends on the importation of many things," he said. And over the decades, it has woven deep ties in Latin America.

Suffice to say, exerting dominance in the region will take more than a military intervention. "China is now South America's chief trading partner," said Mantovani, the Venezuelan sociologist. "That is unacceptable for the US, it's not sustainable for a reformulation of power."

"You can think of US power as a table that has a leg that is being eaten by termites", Mantovani said. "If you don't act quickly, that leg is going to split and the table, that system of industrial, financial, military and cultural might, is going to fall down".