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Hello Power Up readers,

It has been a whirlwind of a week in world affairs amid rapid and dramatic developments in Venezuela – and it’s only Thursday! If you feel overwhelmed by the news flow, you’re not alone. So let me try to recap (some of) the most notable events in the energy world.

Last Saturday President Donald Trump said U.S. oil companies will go into Venezuela and spend billions of dollars to rebuild its damaged oil infrastructure and ramp up production after the U.S. capture of President Nicolás Maduro.

On Wednesday, Trump announced that Caracas and Washington have reached a deal to export up to 50 million barrels of Venezuelan oil worth up to $2 billion to the United States. The deal will divert supplies from China and alleviate pressure on Venezuela’s struggling oil production as it continues to face a U.S. blockade on exports. Administration officials later went further, saying that the U.S. needs to control Venezuela’s oil sales and revenue indefinitely to stabilize that country's economy.

Also on Wednesday, U.S. forces captured two Venezuela-linked oil tankers in the Atlantic Ocean, including one sailing under Russia’s flag as part of Trump’s aggressive push to dictate oil flows in the Americas.

As I discussed in the Monday newsletter, Venezuela’s oil production isn’t big on the grand scheme of things, accounting for less than 1% of global supply. Still, U.S. refineries are set to benefit from the influx of Venezuelan crude, while Chinese rivals will be the main losers.

As for the longer term, rebuilding the country’s infrastructure and production will take years and billions in investment. Add to this the tremendous political and legal uncertainty, and U.S. oil companies may conclude Trump’s offer to invest in Venezuela’s oil riches is not such an attractive prospect.

These are momentous events, nevertheless. Trump’s plan to control Venezuela’s oil production and exports tears up the global energy playbook and underscores the seriousness of the administration’s ambition to dominate the Western Hemisphere.

More on this below

Here are a few more headlines:

As always, don’t hesitate to contact me at ron.bousso@thomsonreuters.com or follow me on LinkedIn with any questions or thoughts.

China may be the ultimate target of the new “Donroe Doctrine” - Trump's rebranding of a 19th-century doctrine that asserted Washington's zone of influence in the Americas. But U.S. oil companies could become the unintended casualties.

By rerouting 50 million barrels of sanctioned Venezuelan oil away from China, the U.S. would thus be seizing the equivalent of around four months of Chinese supplies and roughly 55 days of Venezuela's current production of around 900,000 bpd.

On top of this, the Trump administration has reportedly told Venezuela's interim president Delcy Rodriguez to sever economic ties with China.

Taken together, the Trump administration’s actions in Venezuela appear to be part of a much broader geopolitical strategy.

The developments over this past week are aligned with the National Security Strategy document the White House published late last year. It called for cementing U.S. dominance in the Western Hemisphere by pushing out competitors and restoring American control over energy and supply chains.

The Trump administration's renewed threats this week to take over Greenland, a self-governing Arctic island that is part of Denmark, are also in line with these ambitions.

Trump’s words and actions suggest that investors may want to start taking the White House’s national security strategy more seriously – and literally.

The American actions in Venezuela however put U.S. companies, particularly oil firms, in a very tough spot.

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