On January 3rd, 2026, news broke that stunned the global community: U.S. military forces had executed a complex operation to capture Venezuelan President Nicolas Maduro. Initial reports focused on drug trafficking as the primary motive, a narrative that seemed plausible on the surface. After all, Venezuela has been deeply entangled in the international narcotics trade for years. However, given the unprecedented nature of the operation—the military capture of a sovereign nation’s leader—and the substantial geopolitical risks involved, the drug angle appeared insufficient to explain such a dramatic move.
According to Jonathan Amoia, to understand what may truly be driving these events, one must look beyond the headlines and examine the economic foundation that has sustained the United States’ global dominance for the past half-century: the petrodollar system.
The Birth of the Petrodollar
The story begins in 1971, when President Richard Nixon ended the gold standard, severing the direct link between the U.S. dollar and gold reserves. This decision fundamentally altered the global monetary system, but it also created a new vulnerability: without gold backing, what would ensure continued global demand for the dollar?
The answer came in 1973, when an OPEC oil embargo quadrupled oil prices and sent shockwaves through Western economies. As the United States faced declining confidence in its currency, Secretary of State Henry Kissinger saw an opportunity. In 1974, he negotiated a groundbreaking agreement with Saudi Arabia, then and now the world’s largest oil exporter.
The deal was elegantly simple and profoundly consequential. Saudi Arabia would price its oil exports exclusively in U.S. dollars and reinvest its dollar surpluses into U.S. Treasury securities and other American assets. In exchange, the United States would provide arms sales and security assurances to the Kingdom. This arrangement gave birth to what became known as “petrodollars.”
The implications were transformative. As oil revenues flowed back into the United States and global demand for dollars surged—since every nation needed dollars to purchase oil—America gained an extraordinary privilege. The country could finance ever-growing deficits while ensuring persistent global demand for its currency. In effect, the petrodollar system allowed the United States to print practically unlimited money and accumulate what is now a $38.5 trillion national debt, while exporting the resulting inflation to the rest of the world.
For five decades, American military spending, social programs, and budget deficits have been funded through this mechanism. The petrodollar became the invisible foundation of American power, perhaps more important than any aircraft carrier or missile system in maintaining global dominance.
Venezuela: The Petrodollar Threat
This brings us back to Venezuela and the question: why now?
Venezuela sits atop the world’s largest proven oil reserves—303 billion barrels worth an estimated $17.3 trillion at current market prices. This surpasses even Saudi Arabia’s reserves and represents approximately 20% of the world’s known oil. From a purely strategic resource perspective, Venezuela is invaluable.
But Venezuela’s significance extends beyond the volume of oil beneath its soil. The country has been actively working to undermine the petrodollar system that has underpinned American economic hegemony since the 1970s.
In 2018, Venezuela announced its intention to “free itself from the dollar.” The country began accepting payment for oil in Chinese yuan, euros, Russian rubles—essentially any currency except U.S. dollars. More troublingly from Washington’s perspective, Venezuela built direct payment channels with China that bypass SWIFT, the global financial messaging system that has long been a tool of American influence and sanctions enforcement.
Venezuela’s partnership with China is particularly significant. Approximately 85% of Venezuela’s oil exports in recent years have gone to China, with payments denominated in yuan rather than dollars. This arrangement directly benefits Beijing’s own efforts to internationalize its currency and reduce dependence on the dollar-dominated financial system.
Venezuela has also cultivated close relationships with Russia and Iran—all members or affiliates of the BRICS economic bloc, which has explicitly stated goals of creating alternatives to dollar dominance. Together, these nations have been working to establish new international payment systems, including discussions of a gold-backed digital currency that would directly challenge the dollar’s reserve currency status.
With sufficient oil reserves to supply global markets for decades, Venezuela has the capacity to significantly accelerate global de-dollarization if it continues to sell its oil in alternative currencies. This isn’t just about Venezuela’s economy—it’s about the architecture of global finance and American power within it.
A Pattern of Intervention
History reveals a troubling pattern when it comes to nations that have challenged the petrodollar system.
In 2000, Iraqi leader Saddam Hussein announced that Iraq would begin selling its oil in euros instead of dollars. Three years later, regime change occurred through military intervention. Iraq’s oil sales reverted to dollars. The weapons of mass destruction that were cited as justification for the invasion were never found.
In 2009, Muammar Gaddafi of Libya proposed creating a gold-backed African currency, the “gold dinar,” for oil trade—a concept similar to the gold-backed digital currency recently proposed by the BRICS nations. In 2011, NATO forces attacked Libya under humanitarian pretexts. Gaddafi was killed, and the gold dinar concept died with him.
Venezuela possesses approximately five times as much oil as Iraq and Libya combined. If the pattern holds, the recent operation to capture Maduro may have less to do with drug trafficking or promoting democracy than with protecting the petrodollar system and, by extension, American economic dominance.
Broader Geopolitical Implications
The Venezuelan operation doesn’t exist in isolation. It’s unfolding against a backdrop of escalating global tensions that suggest a broader confrontation between the United States and the emerging multipolar world order.
Iran, another vocal critic of dollar dominance, has erupted in revolution across more than 100 cities. The United States has been actively seizing Venezuelan oil tankers that are part of Russia’s “shadow fleet”—vessels used to evade sanctions. China has openly accused America of stealing “its” oil in Venezuela, framing the intervention as an act of economic warfare against Beijing.
These developments suggest that what’s happening in Venezuela reverberates far beyond Latin America. The operation impacts Russia, which has been building economic ties with Caracas. It constrains China’s access to critical energy resources and challenges its efforts to de-dollarize. It sends a message to Iran and other nations considering abandoning the dollar for oil sales.
Markets at a Crossroads
As these geopolitical stresses reach a fever pitch, financial markets appear remarkably sanguine—perhaps dangerously so.
The Shiller PE ratio, a valuation metric developed by Nobel Prize-winning economist Robert Shiller, provides a long-term view of whether stocks are overvalued or undervalued by smoothing out short-term earnings fluctuations. Since 1881, the long-term average has hovered around 16 to 17. Readings between 25 and 30 are generally considered overvalued.
The index recently crossed 40—only the second time this has occurred in 145 years of recorded history. The first instance was December 1999, just before the dot-com crash. By this measure, stocks have been cheaper than today 98.9% of the time.
The market isn’t broken, but it is priced to perfection in an increasingly imperfect world. Investors appear to be betting that geopolitical tensions will resolve favorably, that the petrodollar system will remain intact, and that American economic dominance will continue unchallenged.
What Comes Next?
Whether the Venezuelan operation proves to be a strategic masterstroke or a catastrophic overreach remains to be seen. What seems clear is that we’re witnessing a critical juncture in the post-World War II international order.
The petrodollar system that has funded American power for half a century faces its most serious challenge yet. The rise of China, the emergence of BRICS as a counterweight to Western institutions, and the development of alternative payment systems all threaten the dollar’s dominance. Venezuela, with its massive oil reserves and its willingness to transact in alternative currencies, represented a tangible threat to this system.
The question now is whether military intervention can preserve an economic arrangement that may be reaching the end of its natural lifespan. Can the petrodollar be maintained through force, or are we watching the early stages of a fundamental restructuring of global economic power?
For investors, policymakers, and citizens alike, the Venezuela operation serves as a reminder that geopolitics and economics are inseparable. The battles that will shape the 21st century may not be fought primarily over territory or ideology, but over the more fundamental question of whose currency will serve as the foundation of global commerce. The outcome will determine not only Venezuela’s future but also the future of American power and the international order that has defined our world for generations.