Since the U.S. is a net oil exporter, controlling massive reserves like Venezuela's is less critical. The real power now lies in controlling the flow of oil to adversaries like China, which is dependent on imports and could be crippled by a supply cutoff.
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While Venezuela is a minor oil supplier to China, Iran is a substantial source of crude and heavy oil used for infrastructure projects like asphalt. A regime change in Iran could lead to the country selling its oil to the West instead of China, creating a significant economic and geopolitical destabilization for Beijing.
Driven by U.S. shale, Brazilian and Guyanese oil, and Canadian pipelines, the Western Hemisphere's importance in global fossil fuel production has surged to levels not seen in nearly a century. This geographic shift fundamentally alters global energy dependencies and geopolitical focus.
China's renewed commitment to the previously stalled Power of Siberia 2 gas pipeline is a direct geopolitical response to the U.S. using trade and energy as weapons. This move signals a strategic pivot to reduce its energy dependency on the Western Hemisphere amid escalating trade tensions.
Protests in Iran, if they disrupt the regime, could halt cheap oil flows to China. This would force China to buy from more expensive, US-friendly markets, strengthening the US dollar's global dominance and isolating anti-Western powers without direct US intervention.
The oil market's lack of reaction to the events in Venezuela demonstrates a key principle: short-to-medium term prices are driven by current production and delivery capacity, not the theoretical size of underground reserves that may take years and billions to develop.
Despite holding the world's largest oil reserves (17%), Venezuela's contribution to global production is minimal (<1%). This critical gap between reserves and output explains why major geopolitical events in the country have little immediate impact on global oil supply or prices.
The conflict is not primarily about oil or drugs, but a strategic move to reassert U.S. dominance in the Western Hemisphere. As China solidifies its influence in the East, the U.S. is 'drawing a line' to counter China's partnerships (like with Venezuela) in its own sphere of influence.
By consolidating influence over Venezuelan and Guyanese reserves alongside its own, the U.S. could control nearly a third of global oil reserves. This would fundamentally reshape energy geopolitics, diminishing the influence of powers like Saudi Arabia and potentially keeping oil prices in a lower range.
Faced with geopolitical uncertainty in key supplier nations, China employs a dual strategy for energy security. It has built a massive oil stockpile providing 120 days of cover for supply disruptions. Concurrently, it's rapidly electrifying its transport sector to reduce its long-term dependence on imported oil.
China has undergone a radical transformation, from being opened by British coal-fired warships in the 19th century to now being a nation whose immense fossil fuel demand and green energy manufacturing dominance fundamentally reshapes the entire global geopolitical landscape.