Global Economy

Resource Wealth and Geopolitical Vulnerability: Understanding Recent US Foreign Policy Toward Venezuela, Greenland, and Iran

Published

3 days ago

January 6, 2026

An evidence-based analysis of how natural resources intersect with state capacity and international relations

In early January 2026, the United States took unprecedented action in Venezuela, capturing President Nicolás Maduro in a military operation. This dramatic escalation coincided with statements from President Trump expressing interest in acquiring Greenland and making references to other resource-rich territories. These events have reignited longstanding debates about the relationship between natural resource wealth, state capacity, and great power intervention.

This article examines three countries—Venezuela, Greenland, and Iran—that share two key characteristics: significant natural resource endowments and varying degrees of geopolitical vulnerability. Rather than starting with conclusions, we’ll explore the complex dynamics that shape how resource abundance intersects with state weakness, international competition, and foreign policy decisions.

The Resource Curse Debate: What Research Actually Shows

For decades, scholars have debated whether natural resource wealth helps or hinders development. The “resource curse” theory suggests that countries rich in oil, minerals, or other commodities often experience slower economic growth, weaker institutions, and increased conflict. However, recent research from the World Bank paints a more nuanced picture.

Research indicates that the relationship between resources and development outcomes is far from deterministic. Countries with similar levels of resource wealth can achieve vastly different results in terms of economic growth, institutional quality, and democratic governance. The key variable appears to be institutional strength rather than resource abundance itself.

Studies examining resource-rich economies found that natural resource abundance and institutional performance indicators can have significant negative effects on economic growth in some groups of economies, confirming the presence of both resource curse and institutional curse. However, these economies have the potential to escape the resource curse provided they are able to build human capital, adopt information and communication technology services, and build quality institutions.

Some scholars have challenged the resource curse framework entirely, arguing for an “institutions curse” instead. Research from the United Nations suggests that weak institutions compel countries to rely on natural resource extraction as a default economic sector, rather than resources inherently weakening institutions. Under this view, resources can actually stimulate state capacity and development when properly managed.

Venezuela: Oil Abundance and Institutional Collapse

The Resource Profile

Venezuela possesses the world’s largest proven oil reserves at approximately 303 billion barrels—roughly 18 percent of global reserves. These reserves, primarily extra-heavy crude in the Orinoco Belt, require specialized refining but represent extraordinary potential wealth.

Beyond petroleum, Venezuela holds Latin America’s largest gold reserves and ranks among top global holders of iron ore and bauxite. The country claims reserves of 340 million tonnes of nickel along with significant copper resources.

From Abundance to Crisis

The Venezuelan case illustrates how resource wealth alone cannot guarantee prosperity or stability. Oil production collapsed from over 3 million barrels per day in the late 1990s to under 1 million in the early 2020s. This decline resulted from a combination of underinvestment, international sanctions, and skilled-labor attrition.

The country’s economic crisis deepened over years of political turmoil, with hyperinflation, mass migration, and deteriorating public services. International sanctions, particularly those targeting the oil sector, further constrained the government’s ability to maintain production or generate revenue from its primary resource.

Recent Developments

According to reporting from the Council on Foreign Relations, the Trump administration’s National Security Strategy emphasizes control of the Western Hemisphere. The operation that captured Maduro represents a dramatic escalation in US involvement in the region, justified partly by concerns about drug trafficking, mass migration, and connections to adversarial powers including China, Russia, and Iran.

Greenland: Strategic Minerals and Arctic Geopolitics

The Resource Landscape

Greenland’s known rare earth reserves are almost equivalent to those of the entire United States. If fully developed, these deposits could meet at least 25 percent of global rare earth demand—a crucial consideration given current supply chain vulnerabilities.

The island holds substantial reserves of lithium, niobium, hafnium, and zirconium, all critical components for batteries, semiconductors, and advanced technologies. These materials are essential for the energy transition and advanced manufacturing.

Development Challenges

Despite this potential, Greenland faces significant obstacles to resource development. Current mining concentrations are relatively low (1-3 percent versus optimal 3-6 percent), driving up extraction costs. Environmental concerns remain paramount, with Greenland passing a law in 2021 limiting uranium in mined resources, effectively halting development of a major rare earth project.

Infrastructure limitations and harsh Arctic conditions add further complexity and cost to any extraction operations. The economic viability of Greenland’s resources depends heavily on global market conditions and technological advances in extraction methods.

Strategic Considerations

According to recent reporting from TIME, President Trump has described Greenland as “surrounded by Russian and Chinese ships,” emphasizing Arctic geopolitics where melting ice caps have opened new shipping routes and access to previously inaccessible resources.

CNN reports that Trump stated the US needs Greenland “from the standpoint of national security,” while Greenland’s Prime Minister responded that “our country is not an object in great-power rhetoric. We are a people. A country. A democracy.”

Chinese companies are already invested in developing Greenland’s resources, reflecting broader competition between the United States and China for critical mineral supply chains. This competition has intensified as nations seek to reduce dependence on Chinese-dominated rare earth processing.

Iran: Energy Reserves and Geopolitical Isolation

Resource Endowment

Iran’s natural gas reserves constitute more than one-tenth of the world’s total, making it a major potential energy supplier. The country also possesses significant petroleum reserves and ranks among the world’s most mineral-rich nations.

With 68 types of minerals and 37 billion tonnes of proven reserves, Iran ranks fifth globally in total natural resource wealth, valued at approximately $27.5 trillion. This includes the world’s 9th largest copper reserves and 6th largest zinc reserves.

Sanctions and Isolation

Iran’s substantial resource wealth has been largely inaccessible to global markets due to decades of international sanctions. These restrictions, imposed primarily by the United States and its allies, have aimed to pressure Iran over its nuclear program and regional activities.

The sanctions regime demonstrates how resource wealth can become a liability rather than an asset when a country faces international isolation. Unable to fully monetize its resources, Iran has experienced significant economic constraints despite its natural endowments.

According to analysis from the Atlantic Council, Iran has long been allied to Venezuela, using Caracas to bypass US sanctions. The operation against Maduro signals to Iran that Washington is willing to pursue regime change when deemed in US interests.

Institutional Capacity and Resource Governance

A key factor distinguishing successful resource-rich countries from struggling ones is institutional capacity. Research published in Energy Policy indicates that strong institutions help countries escape the resource curse, though the emphasis on institutions as solutions sometimes ignores the circumstances under which institutions are formed and how they change.

When governments derive most revenue from resources rather than taxes, they face less pressure to provide responsive governance. Citizens cannot easily hold leaders accountable through the power of the purse. This dynamic can lead to what scholars call “rentier states” where political legitimacy depends on resource distribution rather than governmental effectiveness.

World Bank research has shown that financial systems are less developed in more resource-rich countries. Studies indicate that unexpected exogenous windfalls from natural resource rents are not intermediated effectively, with institution building and regulatory reform being even more important in resource-rich countries.

However, institutional weakness itself may precede resource development. Academic analysis suggests many countries developed resource extraction as a default economic sector precisely because weak institutions prevented cultivation of more diversified economies.

Great Power Competition and Strategic Resources

The contemporary geopolitical landscape is characterized by intensifying competition for strategic resources, particularly critical minerals essential for advanced technologies and the energy transition. China currently dominates global critical mineral supply chains, creating vulnerabilities for other nations.

This competition manifests differently across our three case studies. In Venezuela, the focus remains primarily on petroleum. In Greenland, rare earth minerals take center stage. Iran’s situation involves both energy resources and strategic minerals, complicated by its geopolitical position in the Middle East.

The Trump administration’s National Security Strategy, as discussed by Council on Foreign Relations experts, has emphasized control of the Western Hemisphere and securing access to critical resources. This approach reflects broader concerns about economic security and technological competitiveness in an era of great power rivalry.

Historical Patterns in Resource-Related Interventions

US foreign policy toward resource-rich regions has historical precedents worth examining. Research indicates the United States intervened successfully to change governments in Latin America 41 times between 1898 and 1994—approximately once every 28 months for an entire century.

While economic interests have often been cited as underlying causes, the reality appears more complex. Multiple factors typically converge: strategic considerations, ideological preferences, corporate interests, and perceived threats to American influence. Pure economic motivations rarely operate in isolation from these other dynamics.

The Role of Sanctions and Economic Pressure

Economic sanctions have become a preferred tool of US foreign policy, particularly toward resource-rich nations. IMF working papers examining natural resource dependence and policy responses have found that the resource curse can be particularly severe for economic performance in countries with low degrees of trade openness.

In Venezuela, oil sanctions dramatically reduced government revenues and production capacity. In Iran, sanctions have prevented full exploitation of vast energy reserves. The effectiveness of sanctions in achieving policy objectives remains debated, but their impact on resource-dependent economies is undeniable.

Sanctions create a paradox for resource-rich nations: possessing valuable commodities provides little benefit if international markets remain inaccessible. This dynamic can weaken already struggling institutions and exacerbate humanitarian crises, though proponents argue sanctions pressure governments toward policy changes.

International Law and Territorial Sovereignty

Questions of international law loom over discussions of great power actions toward weaker states. Foreign Policy reporting notes that the United Nations Security Council held an emergency meeting following the Venezuela operation, with Colombia’s UN Ambassador stating that “there is no justification whatsoever, under any circumstances, for the unilateral use of force to commit an act of aggression.”

The principle of territorial sovereignty, enshrined in the UN Charter, theoretically protects nations from external intervention regardless of their resource wealth or institutional capacity. However, the practical application of these principles has been uneven. As a permanent member of the Security Council, the United States can veto resolutions and block punitive measures.

Greenland’s status as an autonomous territory within the Kingdom of Denmark adds additional legal complexity to any discussion of its future. While Greenland has substantial self-governance, Denmark retains control over foreign affairs and defense policy.

Looking Forward: Implications and Uncertainties

Several key factors will likely shape future dynamics around resource-rich states:

Technology and Markets: Advances in extraction technology, changing global demand patterns, and shifts in energy systems will all influence which resources matter most and how accessible they become.

Climate Change: Arctic warming makes previously inaccessible resources more reachable while simultaneously raising environmental concerns about extraction in fragile ecosystems.

Multipolar Competition: As China, Russia, and other powers increase their global engagement, resource-rich nations may have more options for partnerships and investment, potentially reducing any single power’s leverage.

Institutional Development: Some resource-rich nations are successfully building stronger institutions and more diversified economies, challenging deterministic narratives about the resource curse.

Domestic Politics: Within both resource-rich nations and major powers, domestic political dynamics will shape foreign policy approaches and resource development strategies.

Conclusion

The relationship between resource wealth, state capacity, and foreign intervention is far more complex than simple cause-and-effect narratives suggest. Venezuela, Greenland, and Iran each possess significant natural resources, but they differ dramatically in their governance structures, strategic environments, and relationships with major powers.

Research from multiple institutions indicates that resources themselves are neither inherently beneficial nor harmful. Rather, their impact depends on institutional quality, governance capacity, and the broader geopolitical context. Countries can escape the resource curse through strong institutions, transparent governance, and economic diversification, though building these capacities presents significant challenges.

For policymakers, the key insight is that resource abundance creates both opportunities and vulnerabilities. How nations navigate these dynamics depends on complex interactions between domestic institutions, international competition, and the evolving global economy. Simple interventions or quick fixes are unlikely to address the multifaceted challenges facing resource-rich states with weak institutions.

Understanding these dynamics requires moving beyond ideological positions to examine specific contexts, historical patterns, and the often-contradictory interests at play. Only through such nuanced analysis can we develop more effective approaches to resource governance and international relations in an increasingly competitive world.

Frequently Asked Questions

Why does Trump want Greenland? Trump has cited both national security and economic reasons for interest in Greenland, emphasizing its strategic location in the Arctic and its substantial rare earth mineral deposits that are critical for advanced technologies.

What natural resources does Venezuela have? Venezuela possesses the world’s largest proven oil reserves (approximately 303 billion barrels), Latin America’s largest gold reserves, and significant deposits of iron ore, bauxite, nickel, and copper.

How do sanctions affect resource-rich countries? Sanctions can prevent resource-rich countries from accessing international markets, limiting their ability to monetize natural resources despite their abundance. This creates economic constraints and can weaken institutions further.

What makes a state “weak” in geopolitical terms? Geopolitical weakness typically refers to limited institutional capacity, economic vulnerability, political instability, military asymmetry compared to major powers, and isolation from international protection mechanisms.

How does resource wealth create vulnerability? Resource wealth can create vulnerability by encouraging institutional weakness (reducing need for taxation), attracting external intervention, enabling corruption, preventing economic diversification, and making countries targets in great power competition for strategic materials.

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