“You can check in any time you want but you may never leave.” (The Eagles, Hotel California)

That might be said of the Petrodollar system that sustains US power and influence in the world and largely explains the gunboat diplomacy employed by Washington against Venezuela.

In his press conference explaining why the US launched a special military operation against Venezuela and kidnapped a neighbouring head of state President Trump called a spade a spade:

“We’re in the oil business. We’ll be selling large amounts of oil to other countries.”

The shale revolution disguised the fact that the US does not possess an abundance of oil – or rather the type of oil it needs.

The shale gas the US has pumped out in recent decades is light crude that does not feed the US refineries. The old US refineries were built 50 years ago and designed to process heavy crude oil. That is why the US with its abundance of oil, continues to still import large quantities of it.

It would also be very expensive to transport the shale oil to California and the east coast, it’s market. Enormous pipelines would be required. It is much cheaper to ship foreign oil to US ports.

The price of oil is very important to the US consumer. It has a major impact on the cost of living and the results of the plentiful elections the US system has.

Heavy crude is produced by Russia, Canada, Saudi and Venezuela. The US has traditionally imported Saudi Arabian heavy oil for its refineries. But Riyadh is not now the US dependency it once was, as it was when its arm was twisted during the mid-1980s to collapse the price of oil and help destroy the Soviet economy. It saw the Western sanctions ranged against Russia in 2022 and began making alternative arrangements. Its future is towards BRICs.

It was the Reagan/Casey strategy of the mid-1980s, aimed at collapsing the global oil price in order to undermine the USSR economy, that destabilised Venezuela. Up to that point it was pumping 3 million barrels of oil a day and the Petrodollars were flowing into the US aligned Caracas. When the oil markets crashed the illusion of prosperity disappeared and this prompted the Chavez coup of 1992. In 1998 he won the Presidency in a landslide on a programme of clearing out the old elite which had ruthlessly cut social spending to preserve its own wealth. The US/Venezuela alliance ended and Caracas reorientated on Bolivarian lines. Sanctions were imposed by George W. Bush on Venezuela.

The US bided its time because it required the Venezuelan heavy crude, especially when it was embarking upon its destabilising adventures in the Middle East. But things have changed.

The US Strategic Petroleum Reserve is at its lowest level. To stop inflation President Biden drained the US energy Reserve. This Reserve of oil was meant for emergencies such as war. But Biden flooded the market to keep prices low to win the 2024 election against Donald Trump. And he also released large quantities to shore up Europe in order to break its relationship with Russia, as part of Washington’s war in Ukraine.

The US Strategic Petroleum Reserve had reached critically low levels just when oil prices were beginning to rise. The instability in the Middle East brought about by the ongoing Israeli threat to Iran was also a factor to consider.

The US Strategic Petroleum Reserve could not be replaced on the open market without economic damage to the US economy, so the only alternative was to seize control of Venezuela’s oil.

It should be understood that the US dollar is not backed by gold or industrial productivity any longer. It is backed by an agreement with the House of Saud made 50 years ago. That agreement dictates that oil must be sold using dollars. This creates a universal need for dollars because everybody needs oil.

This system created the ability for the US to print dollars out of thin air. Ordinarily this would produce inflation, but it does not have the same implication it would if others did it, due to the need for dollars around the world in purchasing energy.

New dollars can always be sold as long as the world needs them for oil. Over half can go abroad, bought by foreigners, making the increased supply only marginally inflationary, since it is absorbed outside the domestic economy.

If another state did this the result would be massive inflation but the US can print as it sees fit and it has been printing and spending despite all promises to curtail, producing an ever growing deficit.

It is the Petrodollar system that is the main source of US power and prosperity these days.

But BRICs threatens the success of this.

There were reports that Venezuela, to escape its bind, was preparing to price its oil in a basket of currencies led by the Chinese Yuan. The Petrodollar system was, therefore, under threat. Venezuela, under long-standing Washington sanctions, and with no way out of its bind that has produced great poverty and depopulation of the country, was threatening to decouple from the dollar.

If this happened the US Treasury Bond Market would begin to collapse.

If Venezuela was successful, the Petrodollar was dead. If the dollar was dead Trump and MAGA were done. Trump inherited a situation in which US sanctions on Venezuela were not achieving anything. Venezuelan oil in the ground is useless to the United States.

The US policy has, therefore, moved from containment of Venezuela to control of Venezuela and its oil.

The US will now hope for a compliant Venezuelan government which will assist the re-integration of Venezuelan oil into the US dollar system, with a rebuilding of the oil industry by US companies, tying it to the needs and control of the United States.

At the time of writing Trump and Rubio are content to work with the present Caracas “regime” with a US gun at its head, rather than importing the Nobel-prize winning Quisling opposition figurehead, María Corina Machado. The maintenance of the present relationship, of course, will be conditional on good behaviour on the part of the Venezualans. Intelligence will have informed Trump that Maduro prepared for US invasion on the Iraq-rearguard model with heavily armed forces in the barrios. Venezuela is awash with weapons and there are revolutionary groups on its borders.

Venezuela has the potential to be a quagmire for the US and Trump if he intervenes in a more substantial way. There is the spirit of Simon Bolivar, waiting in the long grass. Maybe one day they will talk of “America’s Ukraine” along with Vietnam etc.

On a historical note, people forget the 1902 Venezuela crisis when the US threatened Britain and Germany with war if it attempted intervention on the American continent against the Monroe Doctrine, that marked out the continent as a sole US sphere of influence.

The British and Germans, who were mounting a naval blockade against Venezuela to recover banking debts, backed down for the first time in the face of US power and President Roosevelt’s ultimatum. The British and Germans were forced to agree to having the dispute referred to international arbitration and settled to US satisfaction. The European Imperialists were successfully warned off and the Monroe Doctrine became a reality.

It was an early indication that Britain, the global hegemon of the time, was prepared to give way to its Anglo-Saxon cousin, rather than risk a disastrous war with the growing young upstart. Instead, the British Empire made war with Germany, twice, and gave way to the US in due course.

This 1902 event is known as the Roosevelt Corollary to the Monroe Doctrine.

Can anybody seriously believe that Trump would tolerate the influence of foreign powers (Russia and China), however minimal, in America’s sphere of influence?

When Trump returned to power earlier this year I suggested that it marked the end of the New World Order (1990-2025). It seems that the BBC and others are now agreeing. Even General Ben Hodges, the main military media supporter of Kyiv, is suggesting that Trump has agreed to spheres of influence with Putin and this explains his desire to withdraw from the Ukraine war. He suspects that the Kremlin, despite its public protests, will be happy with what Trump has done in Venezuela. One has to agree.

Trump is cleaning house in his own Western Hemisphere and probably plans to use the vast Venezuelan oil reserve to influence the global energy market, defending the Petrodollar, from the growing threat to it from BRICs and multi-polarity.

What has just happened in Venezuela is the US cleaning house within its sphere of influence, the Western Hemisphere, and hoovering up its resources in the US interest. Trump always promised America First.

This is, perhaps, the best signifier of the end of the New World Order (1990-2025) and the new developing multipolar world in which nations look after their own interests.

It looks like Samuel Huntington (Clash of Civilizations) was right and Francis Fukuyama (End of History) was wrong.

There will be more to come. When does USA’s SMO #2 Greenland begin?

Trump, of course, is no aberration. Remember President Manuel Noriega of Panama, long time CIA asset, captured by the US in 1989 in President Reagan’s final days, and subsequently put on trial by his former American ally. Noriega was a real drug dealer, run by Washington, against the Sandinista government in Nicaragua. He died in prison, like Jeffrey Epstein.

This latest US action in Venezuela truly signifies the end of the US rules based international order (1990-2025).

While Trump calls a spade a spade Sir Keir Starmer, the great “human rights lawyer” cannot say if his actions are a breach of international law. Or he dare not say!

Instead Starmer, Von der Leyen, Kallas etc. meekly pretend this was a blow for Western democracy against an authoritarian. Nothing is said about the 80 or so extra-judicial killings of Venezualan and Cuban citizens by US forces.

They long for the old world – the US rules based international order (1990-2025) – which Trump sees as over, but which they dearly yearn for to return.