The Implications of U.S. Action in Venezuela on the Energy and Critical Minerals Sector

This alert details the information regarding the U.S. arrest of Nicolas Maduro for drug trafficking charges and its impact on Venezuela’s oil, gas, and critical minerals industries, as well as travel in the region.

Overview of U.S. Arrest of Nicolas Maduro

In the early morning of Jan. 3, the United States carried out Operation Absolute Resolve to capture the leader of Venezuela, Nicolas Maduro, and his wife, Cilia Flores de Maduro, to undergo criminal court proceedings in the United States related to a 2020 indictment from the Department of Justice (DOJ) on charges of narcoterrorism and drug trafficking, as well as several other federal charges related to narcotics and weapon possession.

The Trump administration created the plan to extract Maduro over a period of several months, which included the buildup of U.S. military assets in the Caribbean since September 2025 and pre-staging efforts in August and September. The U.S.-Venezuela relationship worsened during this period as the United States carried out roughly 35 strikes in the Caribbean and Pacific Ocean against boats allegedly involved in drug smuggling. Many analysts speculated that the strikes were an aspect of the Trump administration’s strategy for regime change in Venezuela.

U.S. authorities brought Maduro and Cilia Flores to New York where they appeared in court on Jan. 5. Both Maduro and Cilia Flores pled not guilty to the DOJ charges. Secretaries Pete Hegseth and Marco Rubio, as well as Attorney General Pam Bondi, CIA Director John Ratcliffe and Joint Chiefs of Staff Chair Dan Caine briefed the House and Senate members of the Armed Services, Foreign Affairs, Foreign Relations and Intelligence committees the evening of Jan. 5 on the operation to arrest Maduro. President Trump will meet with House Republicans at their retreat at the Kennedy Center on Jan. 6, where we expect the topic to be discussed on the margins of an agenda focused on cost-of-living solutions.

The Trump administration conducted the operation without congressional authorization, and it did not provide a briefing to Congress before the operation occurred, in part to ensure success of the operation and to prevent any information from being leaked. Sen. Tim Kaine (D-VA) vowed to force a vote in the Senate this week to block further military action in Venezuela without congressional approval, and House Democrats said they are considering a similar measure.

With the removal of Nicolas Maduro , Vice President and Minister of Energy Delcy Rodriguez was sworn in as acting president, with the support of other members of Maduro’s cabinet, such as Defense Minister Vladimir Padrino and Interior Minister Diosdado Cabello. President Trump said the United States will play a key role in deciding the next steps for Venezuela and it will temporarily “run” Venezuela until a leadership transition is able to take place. Secretary Rubio added that it is too early to discuss elections in Venezuela, but the United States will keep a military “quarantine” in place, especially on Venezuela’s oil industry to exert leverage on the new leadership.

Energy Sector Opportunities and Risks

A central motivation behind the Trump administration’s seizure of Maduro appears to be an effort to reset Venezuela’s oil sector with direct involvement from U.S. companies. Speaking at Mar-a-Lago following Maduro’s capture on Jan. 3, President Trump characterized Venezuela’s oil industry as “a total bust for a long period of time” and asserted that U.S. oil companies would invest billions of dollars to repair infrastructure and resume production. This followed President Trump’s earlier demands that Venezuela return oil assets and other property nationalized under Hugo Chávez, claims that remain the subject of roughly $60 billion in outstanding arbitration and legal disputes involving Petróleos de Venezuela, S.A. (PDVSA) and the Venezuelan state. U.S. companies have yet to confirm their intent to invest more in Venezuela’s energy sector, particularly since several are still owed billions in outstanding expropriation awards; these companies also assert that the Trump administration has yet to engage with them on the possibility of said investment, counter to Trump’s assertions.

Any near-term progress toward renewed oil production remains highly dependent on political, investment climate and security conditions inside Venezuela. While President Trump asserted on Jan. 4 that he is “in charge” of the country, Maduro’s security apparatus and senior officials remain in power and the United States maintains a naval blockade on Venezuelan crude shipments. The blockade, combined with the seizure of blacklisted tankers and the loss of Russian naphtha supplies used to dilute heavy crude, has pushed exports sharply lower and raised the risk that production could fall below 700,000 barrels per day (b/d) absent sanctions relief or a political transition. Lifting these constraints would likely require an orderly change in government and adjustments to U.S. sanctions policy.

Despite these challenges, Venezuela’s resource-rich status continues to drive interest in longer-term recovery scenarios. Oil production has declined by roughly two-thirds since the late 2000s due to sustained underinvestment and mismanagement, but the country still holds approximately 300 billion barrels of proven reserves. Its heavy, sour crude is well-suited to U.S. refining capacity, particularly as relations with Canada, a key supplier of similar grades, remain under pressure. Data and analytics firm Kpler estimates that basic repairs and maintenance could lift output to around 1.2 million b/d by the end of 2026 if sanctions are lifted, while JPMorgan projects production of 1.3-1.4 million b/d within two years, assuming a stable political transition occurs.

Achieving more substantial gains would require overcoming significant hurdles that continue to deter private investment. Restoring production to levels seen 15 years ago would require more than $100 billion in upstream investment alone, according to estimates by Rystad Energy, and this would likely need to be paired with large-scale reforms at PDVSA, as well as significant investments in infrastructure necessary to evacuate the oil. Meanwhile, several major U.S. producers have publicly stated that it remains too early to decide on future investments given the evolving security and governance situation.

Market conditions may also pose a constraint. The current price of oil is $57 per barrel, hardly high enough to justify a business case for billions of investment in Venezuela’s energy sector without guarantees on investment returns. The International Energy Agency (IEA) expects global oil supply to exceed demand through the end of the decade, driven by rising output from producers such as Brazil, Guyana and the United States. However, administration officials continue to engage industry leaders, including through planned discussions led by Energy Secretary Chris Wright at the Goldman Sachs Energy, Clean Tech & Utilities Conference this week.

Mining Sector Opportunities and Risks

Beyond hydrocarbons, Venezuela’s resource base includes significant untapped mineral potential that could draw renewed attention if the investment climate shifts. The country holds substantial reserves of gold, iron ore, bauxite and diamonds and has also been identified as possessing potentially large deposits of coltan and rare earth elements.

Specifically, much of Venezuela’s minerals potential revolves around the Orinoco Mining Arc, a resource-rich region covering roughly 112,000 square kilometers south of the Orinoco River. The government has claimed the area contains more than 8,000 tons of gold, along with commercially viable quantities of diamonds, nickel, coltan and copper. However, rather than developing into a legitimate mining hub, the region has become associated with illegal extraction, armed groups, corruption and environmental degradation. Large-scale industrial mining has failed to materialize, leaving much of the resource base undeveloped or exploited by illicit entities.

The Trump administration’s broader emphasis on securing critical minerals and rare earth supply chains has increased U.S. commercial interest in countries with significant undeveloped reserves. Administration officials have repeatedly framed access to these materials as a national security and economic priority, particularly as the United States seeks to reduce reliance on adversarial suppliers. In that context, a restructured Venezuelan mining sector could attract U.S. capital and technical expertise, provided political conditions continue to evolve in a favorable manner.

Next Steps

The situation in Venezuela is still evolving, but the Trump administration expressed hope for a leadership transition. President Trump appears to favor Interim President Delcy Rodriguez running Venezuela until a leadership transition can occur, especially if Rodriguez delivers on U.S. requests. However, the Trump administration warned that if Rodriguez and the interim government of Venezuela fail to comply with U.S. requests, the administration will use its naval task force in the Caribbean to cut off oil exports.

The Trump administration did not signal a leadership role for the opposition party, led by Maria Cornia Machado, or the victor of the July 2024 election, Edmundo Gonzalez. Some speculate that this is because many supporters and members of the opposition party fled Venezuela under the Maduro regime’s rule. The coming months under the transition will focus on continuing the Trump administration’s immigration policies, opening Venezuela’s energy and critical mineral sectors to U.S. businesses, and ensuring there is a leadership transition from the Maduro regime.

President Trump issued warnings that Cuba, Colombia, Mexico, Iran and Greenland “are next” but did not provide specific details on plans. Despite the warnings, the U.S. capture of Maduro is likely to destabilize Cuba’s government enough due to Cuba’s dependence on Venezuela.

Brownstein will continue to monitor the situation in Venezuela, and our International and Critical Minerals teams have extensive experience on engaging the U.S. government on issues related to international energy, critical minerals and the Western Hemisphere. Our team is uniquely positioned to engage with officials in the Trump administration and Congress on the developing situation in Venezuela. If you are interested in engaging on the situation in Venezuela or in international energy and critical minerals issues, please contact one of the authors of this alert.

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THIS DOCUMENT IS INTENDED TO PROVIDE YOU WITH GENERAL INFORMATION REGARDING THE EFFECT OF THE U.S. INTERNVENTION IN VENEZUELA ON CRITICAL MINERALS. THE CONTENTS OF THIS DOCUMENT ARE NOT INTENDED TO PROVIDE SPECIFIC LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS ABOUT THE CONTENTS OF THIS DOCUMENT OR IF YOU NEED LEGAL ADVICE AS TO AN ISSUE, PLEASE CONTACT THE ATTORNEYS LISTED OR YOUR REGULAR BROWNSTEIN HYATT FARBER SCHRECK, LLP ATTORNEY. THIS COMMUNICATION MAY BE CONSIDERED ADVERTISING IN SOME JURISDICTIONS.