Every Oil Empire Thinks This Time Will Be Different.

It’s a very weird Monday back from the holidays. While most of us were shaking off jet lag and reminding ourselves who we are when we’re not sleeping late and hanging with family, the world woke up to a piece of news this weekend that showed no one in power learned a goddamn thing in history class: the United States has rendered Venezuela’s president to New York, and powerful people are openly fantasizing about “fixing” a broken country by taking control of its oil.


This isn’t a defense of Nicolás Maduro. He presided over the destruction of a nation sitting on the world’s largest proven oil reserves. Venezuela’s state now barely functions beyond preserving its own power. The Venezuelans I’ve spoken with have a wide variety of feelings about an incompetent dictator being arrested by the United States.


But what’s clear is that anyone who has read anything knows that the history of oil grabs is a history of financial disaster. So when I hear confident talk about oil revenues flowing back to the U.S., I don’t hear a plan. I hear the opening chapter of a time-honored financial tragedy that’s been repeated again and again, even in our lifetimes.


Let’s put aside the moral horror of military invasion and colonial brutality, and just focus on whether the money ever actually flows back to the invader. Example after example shows it doesn’t: Iraq was supposed to stabilize energy markets. Instead, it delivered trillions in war costs, higher deficits, and zero leverage over oil prices. Britain’s attempt to hang onto the Suez Canal ended with a humiliating retreat, an IMF bailout, and the end of its time as a superpower. France’s war in Algeria collapsed its government. Dutch oil extraction in Nigeria boomeranged back home as lawsuits, environmental liability, and reputational ruin.


Oil empires all make the same mistake: they think they can nationalize the upside while outsourcing the risk. In reality, profits stay local or corporate. Costs always come home. And we’re about to learn it all over again.


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