Earlier this year, U.S. forces snatched Venezuela’s Nicolas Maduro from Caracas, and the Trump administration stepped in to take over the country’s oil industry. Many appear to have expected the same with Iran, sooner or later, but for now, it seems President Trump is in no hurry to plan an oil seizure—likely because Iran is a very different story from Venezuela.
“You look at Venezuela,” the U.S. president told NBC News. “People have thought about it, but it’s too soon to talk about that.” The rather cryptic response suggests that Trump appreciates the much more complicated situation he is in with Iran. Venezuela’s oil seizure was easy and straightforward. Venezuela, as cynical geopolitical observers like to say, is in Washington’s backyard. This is not the case with Iran, as most recently proven by the fact that the war the United States and Israel launched against Tehran is taken longer than perhaps hoped for, and has caused a major disruption in global oil and gas trade.
Trump’s latest remarks about the war featured a statement that it was going to end “very soon”, which prompted a selloff among oil traders, who were apparently eager to see lower oil prices. These statements, however, should be taken with a pinch of salt since the situation is not a hundred percent under President Trump’s control.
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“We’re very proud to be involved in this and it’s going to be ended soon,” Trump told the media this week, as cited by CBS. “And if it starts up again, … they’ll be hit even harder.” Further, Trump said that “major strides toward completing our military objective.” That military objective remains a sort of a moving target, but earlier in the war, Trump declared that nothing short of unconditional surrender would satisfy him. However, it is noteworthy that there have been no references to oil in any of the U.S. president’s recent warnings to Iran and statements about the objectives of the war to the media.
The problem is obvious enough. In Venezuela, Trump basically went in and took the oil. There was no resistance from either the government or the army. In Iran, such resistance is a certainty, meaning that if the U.S. president wants to take over Iran’s oil, he would have to go in with troops—something Trump does not appear to consider among his preferred options, especially in an election year.
Commentators like to talk about installing a pro-U.S. leader but that would be as challenging as taking over the oil industry with “boots on the ground”. History suggests that attacks on a country’s leadership only strengthen that leadership, and Iran itself is a good case in point—years of sanctions have done the opposite of shaking the authority of the religious leaders. On the contrary, they have served to cement them in their leadership positions, reducing the chances of reforms taking place anytime soon.
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Speaking of sanctions, Trump also said this week that sanctions on “some countries” will be lifted to make up for the supply disruption in the Persian Gulf. Seeing as the three countries with oil sanctions are Venezuela, Iran, and Russia, and Venezuela is already in the fold, the sanction relief likely concerns Russia.
“So, we have sanctions on some countries. We’re going to take those sanctions off until this straightens out,” Trump said Monday at a news conference. “Then, who knows, maybe we won’t have to put them on – there’ll be so much peace,” he said, as quoted by Al Jazeera. Meanwhile, traffic in the Strait of Hormuz remains paralyzed, with reports about one oil tanker traversing the strait on Monday with its transponder turned off. Per Windward’s latest update, two vessels passed Hormuz on Monday, both Iranian-flagged.
By Charles Kennedy for Oilprice.com
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