Key facts
- Acting President Delcy Rodríguez agreed to grant the U.S. control over about one-fifth of Venezuela's oil reserves.
- Many Venezuelans view the deal as a national surrender, despite potential economic benefits.
- Oil has historically shaped Venezuela's identity and economy, transforming it from an agrarian nation.
- The state-owned Petróleos de Venezuela S.A. (PDVSA) historically subsidized many social programs.
- Years of mismanagement, corruption, and falling oil prices have led to a severe economic crisis.
- Millions of Venezuelans have migrated due to economic hardship, food shortages, and hyperinflation.
Venezuelans are grappling with a profound sense of national pride being bruised by a recent agreement that grants the United States control over approximately one-fifth of the country's vast oil reserves. This deal, brokered by acting President Delcy Rodríguez, is seen by many as a surrender, despite the potential for generating billions of dollars for an economy devastated by years of mismanagement and sanctions.
Oil has been central to Venezuela's identity for over a century, transforming it from a poor agrarian nation into a regional power. The discovery of oil in the 1920s fueled economic growth and cultural development, with U.S. companies even popularizing baseball in the country. Historically, oil revenues have funded extensive social programs, leading to a deep-seated belief among Venezuelans that these resources belong to the people.
The nation co-founded OPEC and, by the 1970s, nationalized its oil industry under Petróleos de Venezuela S.A. (PDVSA), which subsidized everything from cheap gasoline to education and healthcare. However, the economy has been repeatedly hit by oil price slumps, notably in the 1980s, leading to social unrest and a failed coup attempt. Later, under Hugo Chávez, resurgent oil prices funded expanded social services, but corruption and mismanagement under both Chávez and his successor, Nicolás Maduro, eroded profits and production.
By 2013, Venezuela plunged into a severe economic crisis, exacerbated by U.S. sanctions. Millions of Venezuelans became migrants, fleeing widespread food shortages and economic hardship. While markets are now better stocked, soaring inflation makes basic necessities unaffordable, with public sector workers earning around $160 per month and private sector employees about $237 last year.
Many Venezuelans had hoped that the capture of Maduro would lead to an end of the ruling party's long tenure and an easing of sanctions. The subsequent legal overhaul allowing private investment in the oil industry was seen by some as a precursor to significant changes. However, the current deal with the U.S. has sparked widespread skepticism and outrage, with some viewing it as a strategic move by the U.S. to gain control over Venezuela's energy sector for its own benefit.