Gold, oil, and the fragility of sovereignty

Known Unknowns

I spent this past Christmas and New Year’s Eve walking through Lima, Cusco, and finally Machu Picchu with family. Peru is breathtaking, but it is also unsettling. Beneath its beauty lies a civilisational wound that never quite healed. You feel it most clearly when you revisit the story of the Inca empire and the moment it met Francisco Pizarro.

This was not a heroic clash of equals. It was an ambush.

When Pizarro arrived in 1532, the Inca emperor Atahualpa ruled an empire of astonishing scale and sophistication. Roads, granaries, astronomy, and administration bound the Andes together. Gold, central to the Inca culture, was not money. It was sacred: the sweat of the sun. Pizarro understood none of this and did not need to. He understood extraction.

At Cajamarca, Atahualpa was lured into a meeting under the guise of diplomacy and was captured in a sudden, brutal attack. Thousands of unarmed retainers were slaughtered. The divine king was imprisoned. What followed is one of history’s most grotesque transactions: Atahualpa offered to fill a room with gold and silver in exchange for his freedom.

The ransom was paid in full. Temples were stripped. Sacred objects were melted down. An entire cosmology was reduced to bullion. Atahualpa was executed anyway, on charges of fratricide, a debated accusation, and an internal matter his captors weaponised.

This is worth stating plainly: the conquistadors did not break a deal. They never believed that one existed. Agreements, morality, and even sovereignty only applied within their own civilisational frames. To the external aggressor, the Inca were not equals. They were an inconvenience sitting on top of valuable resources.

Gold was the 16th century’s ultimate prize. Oil has played the same role for the last hundred years.

Petroleum has powered economies and reordered global power itself. Control over oil has determined currencies, wars, coups, and the very definition of sovereignty.

In this light, Venezuela is not an aberration. It is a continuation. The country holds the largest proven oil reserves in the world, estimated at over 300 billion barrels. At its peak, oil accounted for more than 90% of its export earnings. For decades, that wealth underwrote social programmes, national pride, and political autonomy. But oil also painted a target on the country’s back. In the modern world order, resource-rich nations that insist on sovereignty are rarely left alone. They are sanctioned, isolated, destabilised, or “rescued” in the name of higher principles that curiously align with strategic interests.

The pattern is familiar. External pressure intensifies. Financial systems are weaponised. Parallel markets emerge. Assets are frozen. Narratives are shaped. Eventually, intervention is framed as inevitable or even benevolent. This is not about excusing governance failures or idealising regimes. That framing itself is part of the problem. It quietly shifts attention away from the central fact: powerful external actors consistently behave as predators when strategic resources are involved.

The oil century has refined this art. The petrodollar system tied energy to global finance, ensuring that access to oil, and, therefore, national survival for many countries, ran through institutions dominated by a handful of powers. Sanctions now achieve what cannon fire once did. Currency replaces cavalry. Markets succeed muskets.

Pizarro did not ask whether the Inca governed perfectly. He did not debate legitimacy or reform. He saw gold, weakness, opportunity, and acted. Modern geopolitics prefers a better language, but the instinct is unchanged. Oil, like gold, becomes the justification after the decision has already been made.

Peru lives with the consequences of this history. The Inca empire did not simply fall; it was dismantled. Knowledge systems were erased. Wealth was extracted. Society was reordered to serve distant interests. The ruins of Machu Picchu are relatively well-preserved because they were cut off. But the voices that built it were never allowed to finish their story.

Venezuela is not silent yet, but the danger is the same. When a nation’s primary wealth becomes the object of external appetite, sovereignty becomes conditional. The question is no longer what people want, but what others will allow.

History is often written as tragedy softened by hindsight. Walking through Peru, it is impossible to miss the lesson that is carved into stone: civilisations are not destroyed because they are imperfect. They are destroyed because someone stronger decides their wealth is better used elsewhere. Gold did that to the Inca. Oil threatens to do the same today to any society whose wealth becomes more valuable than its voice.

The writer is the former CTO of Tata Group and founder of AI company Myelin Foundry is driven to peel off known facts to discover unknown layers.

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.