Overview
Venezuela’s devastating June 24 earthquakes have transformed a delicate post-Maduro transition into a high-stakes test of the Trump administration’s strategy to maximize US influence. The Trump administration’s approach aims to advance US regional dominance and secure access to Venezuela’s energy resources, but this strategy risks further political instability and could undermine prospects for long-term democratic and economic recovery.
Venezuela’s political and economic future was already uncertain before the 7.2 and 7.5 magnitude quakes. The January 3 capture of former President Nicolas Maduro by US forces raised the hopes of the political opposition led by the exiled Maria Corina Machado. However, the Trump administration has instead backed the interim government of Maduro’s former vice president, Delcy Rodriguez. Rodriguez has largely accommodated US interests by reforming energy sector regulations, inviting new foreign investment and ceding stewardship of state revenues to the US Treasury Department. However, following last month’s earthquakes, President Trump’s pledge to “run Venezuela” has transformed into a liability, and his goal of stabilizing the Rodriguez regime has become a potential powder keg.
From Natural Disaster to Political Catalyst
As of July 16, the death toll from the June 24 earthquakes has risen to nearly 5,000, and the United Nations estimates around 50,000 are still missing. Although the scale of the devastation is still to be fully measured, political fault lines are already emerging. President Rodriguez immediately sought to take full control of recovery operations, enacting restrictions on grassroots relief efforts. Nonetheless, much of the immediate search-and-rescue work was done by civilian volunteers, which prompted criticism of the government’s capacity to respond. This was compounded by accusations that years of neglect under Chavista rule left buildings vulnerable to collapse, with public housing units in La Guaira among the most heavily impacted.
Natural disasters have historically served as catalysts for political transformation in Latin America. In Nicaragua, a 1972 earthquake devastated the capital Managua and killed thousands. The Somoza regime’s corrupt response to the disaster, including the embezzlement of aid funds, fueled public anger and eventually led to the 1979 Sandinista revolution. After Haiti’s 2010 earthquake, aid largely passed through nonstate organizations rather than the country’s corrupt government, increasing short-term efficiency but exacerbating political instability in the long run. On the other hand, recent research argues that natural disasters can open a window of opportunity for democratization by creating doubt about government power and decreasing the opportunity cost of resistance. In Venezuela, public anger has already evolved into open dissent against the government as fear of repression is eclipsed by grief and frustration.
Trump’s Response Seeks to Maximize US Leverage
The US has sent around 2,000 troops to Venezuela to support recovery efforts, including the deployment of aircraft, naval assets and drones. The Trump administration has given more than $300 million in aid to Venezuela for disaster relief. Against the backdrop of the recent dismantling of USAID, this support demonstrates the US’s unique commitment to investing in Venezuela’s future. However, a much greater investment will be required to meet Trump’s goal of tapping into Caracas’ vast oil reserves. While Venezuela’s oil infrastructure seems to have survived the earthquakes without serious damage, estimates indicate that $80 to $90 billion worth of investment is needed over six to seven years to return Venezuela’s oil output to early 2010s levels.
To secure investments in Venezuela’s future, investors need to be convinced of the long-term stability of the political environment. This bar is especially high for companies which have already had assets seized under previous rounds of nationalization. The Trump administration is betting on interim President Rodriguez to be the face of continuity, while seeking to constrain the opposition leader Maria Corina Machado. Machado is a classical liberal who won the 2023 opposition primary but was barred from running in the 2024 presidential elections. She has sought to court the Trump administration, gifting President Trump the Nobel Peace Prize she won in 2025, but to no avail. The US actively blocked Machado’s “ill-timed” efforts to return to Venezuela following the June earthquakes due to concerns that her presence could disrupt rescue operations. In early July, her flight from Virginia to Curaçao turned around after US officials revoked its authorization. More broadly, the US sees Machado’s influence in Venezuela as potentially disruptive to its special arrangement with the Rodriguez government that has so far allowed Washington to extract valuable concessions.
President Trump’s bet on Rodriguez has given the US unprecedented control over Venezuela, with Secretary of State Marco Rubio reportedly steering government policy and directing the flow of public funds through a special financial mechanism. Under Executive Order 14373, Venezuelan export revenues are received by the Treasury Department as Foreign Government Deposit Funds and held on Venezuela’s behalf. These funds can then be disbursed through Venezuela’s banking system under conditions set by the State Department. Washington is also seeking to influence the restructuring of Venezuela’s $240 billion debt, where US control of Venezuelan revenues provides significant leverage. Wall Street investment banking firm Centerview Partners is advising Venezuela on the debt restructuring, which is set to be one of the largest in history, including over $100 billion in sovereign and state oil company (PdVSA) bonds.
Risks of the US Strategy in Venezuela
On July 14, Venezuela’s interim government confirmed that it will begin formal talks with the opposition on August 1. The talks will aim to promote “stability, democracy, and national recuperation” according to a statement by Venezuela’s national assembly, which was echoed by Marco Rubio. However, the opposition will not be represented by Machado, but instead by Dinorah Figuera, who led the opposition’s 2015 national assembly. Figuera spent years in exile in Spain before returning to Venezuela this June at the invitation of the State Department, just a week before the earthquakes. Her arrival in Caracas and meetings with US and Venezuelan officials effectively undermined Machado’s influence by splitting the opposition’s leadership.
The Trump administration’s approach of maximizing its influence in Venezuela through Rodriguez has presented some upside risks for US interests and businesses. Rodriguez’s partial reform of Venezuela’s Organic Hydrocarbons Law, published January 29, aimed to reopen Venezuela’s oil industry to private investment, and US oil majors sent technical teams to Venezuela to inspect oil fields. Since January, OFAC has issued a series of general licenses easing some sanctions on investments and exports of crude oil. The Foreign Government Deposit Funds mechanism under Executive Order 14373 has shielded Venezuelan oil revenue from judicial processes such as attachment, lien or garnishment, and has given the Treasury Department more leverage to prevent revenues from funding corruption. This has also benefited the Venezuelan government by protecting its revenues from creditors seeking billions in debt repayment.
The status quo offers the US unprecedented political leverage and financial control over Venezuela, but it also creates downside risks that will only be magnified by the aftermath of the June 24 earthquakes. While this moment presents an opportunity for democratization, history has shown that lack of accountability after such a disaster can turn political tides and serve as a catalyst for future instability. This risk is also detrimental to President Trump’s goal of unlocking Venezuela’s natural resources, which is only possible if investors have a high degree of certainty regarding the country’s political future. The January capture of Maduro and recent humanitarian assistance has won the US a degree of goodwill among many Venezuelans, but it could be easily lost if Venezuelans feel that the US does not have their interests at heart. In the long run, this could damage the business environment for US companies operating in Venezuela by fueling support for anti-US policies under future Venezuelan governments.
The recent announcement of Figuera’s role in talks with the Rodriguez government signals the Trump administration’s intention to continue with its current strategy in Venezuela post-earthquakes. Despite Trump’s aim of leveraging US influence over Venezuela to improve the environment for US investors, the downside risks in Venezuela currently outweigh the upside risks from a business perspective. After experiencing the nationalization of foreign assets under Chavista rule, US businesses want certainty around Venezuela’s political future, and the aftermath of the recent earthquakes is a recipe for volatility. The deep involvement by the Trump administration in Venezuela also means that, while the US may reap the benefits of a successful recovery there, it will also have to own any outcome in the case of failure.
