The Trump administration’s Jan. 3, 2026, attack on Venezuela represents a blunt return to petro-imperialism. This mode of foreign policy prioritizes corporate profits and hegemonic control over consumer welfare and international legitimacy. In his press conference after the U.S. attack, President Donald Trump repeated the word “oil” 20 times. According to Trump:
Venezuela unilaterally seized and sold American oil, American assets, and American platforms costing us billions and billions of dollars. They did this a while ago, but we never had a president that did anything about it.
U.S. military actions frequently seem to target oil-producing countries like Iran, Libya, and Iraq – and it’s no coincidence. Oil and war go together, my research finds. Even so, this attack on Venezuela is unlike those previous conflicts in crucial ways.
There are basically two ways to run the global oil market: petro-imperialism and petro-consumerism. Historically, the United States has embraced both modes at various times. Understanding how this works is essential for making sense of what’s happening right now in Caracas, and what the U.S. actions this week mean for American foreign policy going forward.
A brief history of oil politics
Petro-imperialism is characterized by the idea that oil production decisions and profits should be controlled by those who can wield the use of force. A clear historical example of this “might makes right” approach is the Anglo-American cartel that controlled world oil from roughly the 1920s until the 1970s. The “Seven Sisters” cartel, made up of the seven U.S. and British oil firms Exxon, Mobil, Chevron, Texaco, Gulf, Shell, and BP, didn’t just dominate oil markets through superior business practices. Their business interests were backed by the military might of their home governments, often brutally. Producing countries that attempted to assert control over their own resources faced economic threats, political coercion, or worse.
Consider what happened when Iran tried to nationalize its oil sector in 1951. Prime Minister Mohammad Mossadegh’s decision directly threatened the interests of the Seven Sisters, particularly the Anglo-Iranian Oil Company (later called BP). The response was swift and ruthless: The CIA and MI6 orchestrated Operation Ajax, which overthrew Iran’s democratically elected government in 1953. This was pure petro-imperialism – the use of U.S. and U.K. power to protect private oil profits and maintain Western control over Middle Eastern petroleum.
Petro-imperialism keeps profits flowing
This model is great for the owners of oil companies. There are big profits to be had when you can use government force to suppress competition, intimidate producing countries, and maintain oligopolistic control over global supply. Historically, lots of those profits flowed to U.S. shareholders and into the U.S. economy, helping to build American prosperity in the mid-twentieth century.
But petro-imperialism has serious downsides – particularly if preserving this model requires violent interventions against uncooperative foreign leaders of nominally sovereign states. Coups, occupations, and support for brutal dictators are a challenge for international legitimacy and undermine any claim to support democracy or human rights. These interventions also tend to generate long-term instability and resentment that eventually blows back against U.S. interests. One good example was Iran’s Islamic Revolution in 1979.
Petro-imperialism also tends to contribute to artificially high oil prices, which is bad for consumers in the U.S. and elsewhere. A cartel that controls supply can restrict production to maximize profits rather than meeting demand efficiently. This benefits oil company executives and shareholders but hurts ordinary people who pay more at the pump. High oil prices also act as a drag on economic growth and disproportionately burden lower-income households. And cozy, corrupt relationships between business and political leaders can lead to oligopolies, which are bad news economically and politically for almost everyone.
Petro-consumerism aims for broader economic gains
The alternative mode of governing the oil market is petro-consumerism. The basic premise here is that oil should be produced and sold at prices close to actual costs under competitive market conditions, in ways that benefit mass consumers rather than corporate shareholders or geopolitical power brokers. The goal is affordable energy that enables economic opportunity.
Oil prices tend to be lower on average under petro-consumerism, which boosts personal mobility, economic growth, and more equal wealth distribution. When energy is cheap and abundant, it’s easier for people to get to work, for businesses to transport goods, and for economies to expand. The benefits flow broadly across society rather than concentrating among oil industry elites.
Oil markets don’t regulate themselves. So governments frequently intervene in the market under either the petro-imperialism or petro-consumerism models. Self-interested firms constantly steer the market to concentrate power and profits, to their benefit. Under petro-consumerism, governments push back by breaking up private oligopolies and managing revenue flows for public goods. This might involve antitrust enforcement, strategic petroleum reserves, adequate environmental safeguards, and competitive auctions for drilling rights.
It’s worth noting that national oil companies can be put in service of either petro-imperialism or petro-consumerism. Saudi Aramco, for instance, has at times served both functions. What matters is not the ownership structure per se, but whether the system is organized to benefit producers and shareholders through market power and coercion, or to benefit consumers through competitive pricing and reliable contracts.
The U.S. government has pursued both models
After the 1970s, the United States tended to favor petro-consumerism, at least in principle. When Iraq attacked Kuwait in 1991 – attempting to seize control of Kuwaiti oil fields and consolidate regional market power – the U.S. military response served petro-consumerism, mostly. The U.S. sought to prevent Saddam Hussein from controlling enough supply to manipulate global prices. The U.S. goal wasn’t about seizing Iraqi oil for American companies.
Domestically, when the U.S. government broke up Standard Oil into many companies like Exxon, Mobil, and Chevron in 1911, petro-consumerism was the motivation. The government recognized that monopolistic control was bad for consumers and the broader U.S. economy. Nominally, that same approach to market competition has continued through to the present. But when the government later allowed reconsolidation of oil companies through mergers like ExxonMobil, it represented a move in the opposite direction, back toward oligopoly. In 2023, a further wave of oil company consolidation was allowed, which I warned would have negative consequences.
Even the controversial 2003 Iraq War offers a revealing case. For all the war’s many problems and deceptions, the United States abstained from seizing Iraq’s oil. Iraqi oil ultimately remained under Iraqi control, even as U.S. forces occupied the country. This restraint – however partial and however motivated by practical concerns about legitimacy – represented a rejection of pure petro-imperialism by U.S. officials.
Petro-consumerism isn’t perfect. It doesn’t fully address environmental externalities, and it is never implemented flawlessly. But this approach typically benefits the average American consumer. And it’s much better for the sovereignty and development of producing countries – and involves fewer wars and human rights abuses than petro-imperialism.
This brings us back to Venezuela
The Trump administration’s military intervention, openly motivated by a desire to seize Venezuelan oil assets, represents an embrace of petro-imperialism (or what Stacie Goddard and Abraham Newman have called “neo-royalism”). The message from the Trump administration is unmistakable: Venezuela’s oil should benefit American interests. And if the Venezuelan government won’t cooperate, the U.S. government is prepared to install one that will.
That approach brings huge risks. As Elizabeth Saunders points out, the attack on Venezuela hurts the credibility of U.S. foreign policy. Long-term stability in Latin America could be rattled by the U.S. intervention, which may well generate exactly the kind of nationalist backlash and regional resistance that undermined previous U.S. misadventures. For Venezuela specifically, a foreign-imposed government decapitation creates additional risks of chaos and long-term economic hardship. And for the world, the U.S. intervention delegitimizes international law and favors the kind of great power geopolitics that Russia and China have long sought, as Seva Gunitsky argues.
The choice between petro-imperialism and petro-consumerism has always been a choice about what kind of world America wants to lead and promote. The Trump team has made its choice clear. The full consequences of this foreign policy decision, however, are still to come.
Jeff D. Colgan is the Richard Holbrooke Professor of Political Science at Brown University and the author of Partial Hegemony: Oil Politics and International Order (Oxford University Press, 2021) and Petro Aggression: When Oil Causes War (Cambridge University Press, 2013). He is on BlueSky at @JeffColgan.
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