Venezuela and the Oil Deal
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Even the Chavistas are angry. Those who pushed back against the argument that Venezuela is and was just another capitalist regime are now being brought face to face with the stark reality
With one palace coup, the so-called Venezuelan socialism fell apart, and Socialism of the XXI century is not mentioned by the leftists either; the founder of the socialism of the XXI century moved away from Chávez when he was president.
The Rockefellers never obtained that kind of deal when they had control of Venezuela’s oil, and the USA is giving $19.00 per barrel to the Venezuelan government; they can not do that in the Middle East, including Iraq or Kuwait.
All that hysteria about communism, drug trafficking, and gangs propagated by Trump and Marco Rubio has vanished; oil was the main concern, and they are already making another commercial deal with Cuba.
The so-called anti-imperialism propaganda has been thrown in the toilet, as Rosa Luxemburg said: All capitalist countries are imperialists or expansionist
More on the deal from the Washington Post
It is just an agreement between thieves and robber barons. They removed one group of thieves ( China and Russia ) to place themselves; the situation is that Russia and China have invested a lot of money in Venezuela in loans and military weapons, and in the sale of petroleum and minerals from the Orinoco basin.
That agreement is not new; it was started during the governments of Joe Biden and Nicolas Maduro, known as the Barbados Agreement, and the details of the agreement were published on Telesur. The agreement allowed Venezuela to sell oil to the USA and to cease the embargo, and promised freedom and human rights- the same crap propagated by the capitalist
.. https://en.wikipedia.org/wiki/Barbados_AgreementAs always, the left-wingers waving the flag of anti-imperialism, but they never waved that flag when Russia, Iran and China were doing the same in Venezuela, even more, the Iranian capitalists used Venezuela to expand their world economic aim, in the same way that Israel was carrying the same objective in Latin America, during the central american civil war, Israel also sold weapons to the paramilitaries and right wings guerrillas
https://www.wrmea.org/1987-january/israeli-arms-sales-to-central-america-an-overview.htmlhttps://time.com/archive/6857280/israeli-arms-for-sale/
Some leftists supported Jimmy Carter’s decision to stop the USA from supporting the Nicaraguan contra, but they were using Israel to supply weapons.
https://www.wsws.org/en/articles/2024/12/31/xzke-d31.html. The right-wing legacy of Jimmy Carter; probably, the USA rulers will elect another nice face to cover the tracks left by Trump, as they did with Obama; in essence, they are all the sameThe deal is not as smooth as Trump has indicated. US oil corporations must invest billions of dollars to update the infrastructure; they are not going to earn profits immediately. This type of petroleum needs a special refinery to be processed, and Gitgco had some refineries in the USA, and they were taken over by the USA. It is a very heavy oil
Why do Yankee multinationals refuse to “loot” Venezuela?
MAR 26
By Máximo Paz
The capture of President Nicolás Maduro by U.S. forces opens, in theory, a window of opportunity for capital – both national and international – to recover the assets expropriated by the Venezuelan state in recent years, to invest in the recycling or reopening of infrastructure and oil wells, and consequently to initiate a relaunch of capital accumulation in a country that today is completely bankrupt. However, this process – described as “imperialist plunder” by both the nationalist left and right – is extremely complex and fraught with obstacles.
One of the main ones is the enormous accumulation of pending arbitration claims against Venezuela, many of them in instances such as the ICSID (International Centre for Settlement of Investment Disputes). Without a global and definitive agreement to resolve these inherited claims, the boards of directors of companies and international credit committees will continue to be reluctant to approve new capital commitments for the country. In other words, multinational capitals are unwilling to invest massively in Venezuelan oil after the lightning invasion of the United States.Beyond the actors today inserted in the Venezuelan fabric, the resolution of these issues is an indispensable requirement for any serious process of economic recovery in Venezuela.
The underlying work that emerges – and which will depend on the conflicting political, economic, and power positions – would be the creation of a structured liquidation mechanism. This could consolidate the fragmented claims against Venezuela and turn litigation into a robust debt restructuring process. Such an approach would go far beyond reducing high court costs: it would allow for the minimum level of balance sheet transparency necessary to regain the confidence of international capital markets.Within this path – consolidating inherited liabilities and offering clarity on their resolution – Venezuela could present investors with a viable economic horizon and be relatively free from the immediate shadow of unpaid debts of the past.
The reason for the unprecedented string of debts
In 2007, President Hugo Chávez implemented reforms on Venezuela’s oil industry by forcing foreign companies to migrate to joint ventures in which PDVSA, the state-owned oil company, retained at least 60% ownership and operational control.
While firms such as Chevron agreed to negotiate and remain in the country under the new conditions, others such as ExxonMobil and ConocoPhillips rejected the terms imposed, chose to abandon their operations and resorted to international arbitration to claim compensation.
State intervention was not limited to the oil sector. Since the early 2000s, Venezuela has faced more than 60 investor-state arbitration proceedings – mainly in instances such as ICSID – with accumulated liabilities in unpaid compensation of around 20,000 million dollars, not counting the interest that continues to accrue. Among the most prominent cases, ConocoPhillips has sought to recover around 10,000 million dollars for the expropriation of its projects in the Orinoco Belt and other related assets.
Since then, Venezuela has failed to reach payment agreements in several arbitration and court judgments issued against it, which has accumulated a stock of external liabilities estimated at between 150,000 and 170,000 million dollars. This figure represents an extremely high debt-to-GDP ratio, ranging from 180% to 200%.
Everything indicates that a deep restructuring of the debt is seen as essential, including at least a 50% cut in the principal, which would open a new and tough tussle between the State and the creditors to define who assumes the real losses. This haircut would force a much more aggressive renegotiation than the previous ones, in which the vulture funds and other holdouts would also have to put up a significant part of the account.
In turn, in the absence of voluntary agreements during the Chavista era, creditors have promoted enforcement actions against Venezuelan assets abroad, with Citgo Petroleum – PDVSA’s US subsidiary – as the main target in US courts. Until recently, the continuity of Maduro’s government and low practical enforceability had slowed down massive collection efforts, leaving numerous unpaid indemnities and claims on hold.
However, a potential change in Venezuelan executive leadership – following Maduro’s capture in January 2026 – could remove that protection from U.S. jurisdiction. But in turn, this political signal, reinforced by declarations of interest in bringing U.S. oil companies into the country, would result in the reactivation of dormant claims, opening the door to new arbitration claims. In this scenario, enforcement strategies will have to be carried out on a global scale.
In 2012, Venezuela denounced the Convention of the International Centre for Settlement of Investment Disputes (ICSID) – effective since July of that year – which further complicates the legal framework for foreign investors operating in the country.
China and Russia
Venezuela’s external debts include bilateral and quasi-bilateral obligations to China and Russia, stemming mainly from state loans and oil financing agreements signed between the 2000s and 2010s. These commitments remain a significant component of the country’s legacy debt that the country has yet to resolve.
China has established itself as Venezuela’s main bilateral creditor. Until 2015, Beijing provided about $60 billion in oil-backed credit lines, through which debt service was covered by direct deliveries of crude oil and refined products instead of cash payments. Although much of these loans have been repaid or refinanced in successive rounds, external estimates indicate that an outstanding balance remains. Due to poor public transparency and multiple restructurings, the figures vary, but most analysts put the remaining exposure at around $10 billion.
Russia’s financial exposure to Venezuela is smaller in magnitude compared to China’s, but it remains significant. During periods of severe liquidity shortage, Russian state-owned entities provided loans and refinancing facilities to both the sovereign government and PDVSA. In 2017, Moscow agreed to restructure around $3.15 billion in bilateral sovereign debt, extending maturities and deferring principal payments. In addition, Russian state-owned companies have signed oil-linked financing agreements and commercial contracts with the state-owned oil company. However, verifiable public information on the outstanding balances of these deals is scarce, and there is no complete and updated official estimate of Russia’s total remaining exposure.
In other words, in the context of disputes, it turns out that the intention to incorporate large foreign oil companies into Venezuela brings an intricacy of magnitudes. The current panorama of fragmented claims and dispersed executions generates an inefficient and uncertain process to resolve inherited liabilities.
For this reason, the capital likely to land after the Yankee invasion pointed, without further ado, to total distrust by not visualising a liquidation horizon that consolidates the demands, standardises the valuation criteria, the rules for calculating interest, payment guarantees and reduces the conflict of litigation.The main error of many optimistic projections (those of pro-market propagandists) or pessimistic projections (those that see a well-oiled mechanism of unpunished looting of resources that directly benefits the promoters of the imperial attack) about the “post-Maduro” stage lies in their excessive enthusiasm in characterising the situation. From the concrete perspective of investors, billions in fresh capital would be subordinated to the payment of tens of billions in arbitration awards, court judgments and embargoes already enforceable, which continue to accrue interest. Although many of these claims are processed in US courts, it is also likely that another wave of lawsuits will arise in judicial courts in other latitudes.
In practice, this implies that future revenues from oil production, dividends or exports could be used primarily to pay off historical debts, instead of reinvesting in the growth of the sector and in the operation of the country’s economy.
U.S. Politics and Capital
Recent interventions in the Venezuelan oil sector reveal a clear divergence between the political agenda promoted by the United States government and the distant stance of the main international oil companies. While the US authorities – including Energy Secretary Chris Wright and President Trump himself – have publicly promoted an accelerated revitalization of the Venezuelan industry with leadership by US companies, the oil majors maintain reservations in the face of the knotted political and economic accumulation that leads to persistent concerns about the legal stability of the contracts, the political durability of the new post-Maduro scenario and, above all, the real risk of recovering their investment in an environment marked by pending litigation and a history of expropriations.
Since January 2026, Washington officials have begun to profile Venezuelan oil as a strategic resource with the potential for immediate reinsertion into Western markets. In their public interventions, they have underscored both the magnitude of the South American country’s proven reserves and the possibility of U.S. companies playing a central role in the recovery of production.The official discourse has also emphasised the executive and administrative tools that would facilitate Venezuela’s access to the international market. These measures, as noted, seek not only to guarantee the stability of energy supply, but also to protect the revenues derived from crude oil in a context of geopolitical reconfiguration.
Despite the official optimism, the big U.S. oil companies maintain a much more cautious stance regarding the future of Venezuelan oil. Executives from ExxonMobil, Chevron and ConocoPhillips warn that, despite the recent political changes, Venezuela remains a high-risk jurisdiction. Three factors mainly explain this mistrust.
First, legal and institutional uncertainty: a history of arbitrary expropriations, unpaid arbitration awards, and frequent changes in the rules of the game have destroyed confidence in the stability of contracts and effective investment protection. Second, collapsed infrastructure: after years of chronic underinvestment, fields, refineries, and pipelines require long terms and billions of dollars in capital before they can produce at full capacity. Finally, the risk of precedent: any measure aimed at shielding oil revenues from creditor claims, even if politically attractive, could end up further eroding the credibility of the property rights and dispute resolution framework. Even explicit support from Washington does not seem sufficient to dissipate the reserves of big oil capital.
Venezuelan politics and capital
The latest political movements in Caracas, although relevant, have not generated the necessary conditions to attract large-scale investments by the main oil companies. After the capture of Nicolás Maduro and his inauguration as interim president on January 5, 2026, Delcy Rodríguez undertook a broad restructuring of power in Venezuela. In just weeks, she removed 14 ministers and four deputy ministers, reorganised a sectoral vice presidency and changed the leadership of the International Investment Centre, which implied the renewal of almost half of the cabinet. On the diplomatic front, she displaced the historic ambassador Samuel Moncada to the UN and appointed Coromoto Godoy in his place, while in Defence she put an end to the long tenure of Vladimir Padrino López. These moves, accompanied by negotiations with the IMF to access 4,900 million dollars, reflect a strategy aimed at consolidating her internal leadership and seeking international legitimacy in a scenario marked by the political and economic crisis.
Still, the gap between stated targets and signals from governments, in contrast to investor silence,e reflects a scenario marked by persistent political and legal risk, resulting in a prudent investment climate and valuations that incorporate high risk premiums.
The small scale
Not all players in the energy market have reacted in the same way to the Venezuelan scenario. While the big oil companies are cautious, trading houses, refineries, and specialised service companies seem more inclined to get involved in the initial phases. Their disposition responds to business models with less capital exposure and shorter investment horizons.
This behaviour reveals a clear pattern: current participation in Venezuela is fragmented and opportunistic. Rather than betting on long-term projects in the upstream sector, interested companies seek to take advantage of immediate business windows, without committing to large-scale structural investments.
The gap between political rhetoric and investor response has become a critical point in the debate over the future of Venezuelan oil. Although official statements seek to convey confidence and reduce perceptions of risk, large funds and energy companies continue to assess the country under strict parameters of uncertainty. Structural risks – from institutional fragility to a lack of regulatory predictability – continue to be reflected in high risk premiums and discount rates that limit the attractiveness of Venezuelan assets.
Without enforceable contracts, stable fiscal frameworks and guarantees against retroactive claims, long-term investment remains conditional. In this scenario, the real value for investors does not lie in an immediate entry, but in the expectation of institutional signals that are still insufficient in the face of such a reality.
This means that the recovery of the sector does not depend only on reopening political and institutional fields or “giving away” contracts: the real challenge is to rebuild credibility. Resolving legacy claims would be key to removing the biggest obstacle to investment and allowing Venezuela to regain access to international capital markets.
Looting
The military irruption of the United States was a coup d’état that reinforces the contemporary ways in which nationalisms define imperialism: a power that acts without regard for any territory on the planet in its insatiable search for wealth and resources, ready to liquidate any local or national production that stands in its way.
However, the reality of the Venezuelan case offers another perspective. Large individual capitals require, as a starting point, to invest a great magnitude. This only materialises when a priori calculations indicate an attractive rate of return (profit) and, according to the averages of the productive branch, supported by concrete bases that guarantee a process of capital accumulation in the long term. In Venezuela, these bases are now totally deteriorated.
In this sense, such intervention in the context of current military interventions no longer responds to the classic mechanism of direct plunder or to the colonial dispute between powers, as was the case in Lenin’s analyses at the beginning of the twentieth century. Today they fulfil a more structural function: to guarantee the political, legal and social conditions that global capital needs to expand without obstacles in its circulation and valorisation. Their primary objective is not the direct appropriation of resources, but to promote stable frameworks that allow the full subsumption of natural resources and productive forces under the rules of the market, competition and private property, conditions that in Venezuela are still far from being consolidated.From Bonanza to Misery: Notes on Chavismo, Oil Income and Its Spiral of Death
MAR 13, 2026
By Máximo Paz
Origins of appropriationIn Venezuela, in the second half of the twentieth century, the widespread form of appropriation of land rent in South America was consolidated. Although it developed particular forms that differentiate it from other countries, this, like all others, was not an impulse towards a competitive industry in the world market, but the development of a productive network oriented to the domestic market, characterised by its low productivity. What is striking is that, despite this structural weakness, many of these industries managed to sustain themselves as normal capital and even obtain extraordinary profits. The key was in oil rent: the State, owner of the land and the country’s main company, poured part of that rent into industrial sectors that, without it, would hardly have survived.
The apparent strength of an internal market sustained by income hid a greater fragility: an industry dependent on subsidies and transfers, incapable of competing on equal terms in the world market. Thus, oil income functioned as a cushion that allowed the appreciation of weak capital, but at the same time reinforced the relative backwardness vis-à-vis the most productively efficient countries on a global scale.
In Venezuela, protectionism and subsidies became fundamental pillars to sustain less competitive capital. These state policies were not a simple replacement for the logic of the market, but a complement to the need for capital to valorise itself through the appropriation of land rent and, above all, oil rent.
This scheme did not only benefit national companies. It also attracted foreign investment: companies that in their countries of origin operated with productivity levels equal to or higher than the world average, but that in Venezuelan territory operated with much lower standards. The explanation is simple: the State guaranteed profitability through subsidies and tariff barriers, which allowed these firms to adapt to a less demanding environment without losing profits.Thus, the Venezuelan rentier model not only shaped the dynamics of local industry, but also conditioned the behaviour of multinationals, which found in the country a fertile ground to operate with less efficiency, but with guaranteed profits thanks to state support.
The eighties. The ninetiesDuring the 1980s and 1990s, Venezuela underwent a profound transformation in the way oil revenues were appropriated. The sharp fall in oil revenues drastically reduced the transfers that sustained the profitability of non-oil capital. The result was a collapse in investment and, in many cases, the destruction of industrial capital.
The non-oil sector lost weight in the appropriation of income and, at the same time, the process of internationalisation of PDVSA began, a public company but under private law, created in 1975 to assume the reins of the oil industry as of January 1, 1976. The flip side of this crisis was social: the impoverishment of the working class became evident with the fall in real wages, the increase in unemployment and the advance of underemployment and informality, often disguised as self-employment.While industry was weakening, banking and financial capital gained prominence. This new axis was articulated with the opening to private investment of PDVSA and the capture of foreign debt, configuring a model where banks displaced industry as a recipient of income. The consequence was twofold: the bankruptcy of an important sector of production and the loss of need for industrial capital and state services as mediators of income.
Privatisations and cuts in spending on health and education became the most visible expression of this transformation. Venezuela went from a scheme of accumulation based on the transfer of income to industry, to another dominated by financial capital and the logic of adjustment, with a direct impact on the daily lives of millions of workers.
Despite the destruction of capital and the expansion of the surplus population, the Venezuelan collapse of the 1980s and 1990s did not mean the total disappearance of the industrial fabric. Some concentrated foreign companies – such as the automobile and food companies – managed to maintain themselves, while other nationalised industries, with the Orinoco Steel Industry (SIDOR) as a paradigmatic example, expanded. However, the productivity gap with respect to capital that marks world accumulation deepened, accelerated by the global productive transformations initiated in the crisis of the 1970s.
The new international division of labour, which fragmented complex processes into simpler tasks, made the technical basis of Venezuelan industry in the mid-twentieth century obsolete. To compensate for this gap, the appropriation of income was no longer enough: new sources of extraordinary wealth were needed. Throughout Latin America, the recipe was similar: falling wages and foreign debt, and Venezuela was no exception.These global transformations explain the character of capital appropriating rent in its new expansion during the 2000s. The collapse of the oil sector cannot be understood as a simple abstract “rentierism” or as the exclusive result of state action, but as part of a change in the magnitude and forms of appropriation of rent.
In the 1960s and 1970s, rentierism was based on industrial expansion and the role of the state. In the 1980s and 1990s, the destruction of capital and the rise of the financial and banking sectors reflected the lower availability of income and the reduction in the weight of industrial capital. And when income expanded again in the 2000s, it was no longer accompanied by industrial growth. The global productivity gap, a product of the fragmentation of production processes, resulted in a stagnation and contraction of the weight of industry in Venezuelan GDP.
ChavismoWith Chavismo, the nationalisation of banks, industries and public services returned, but the State did not resume the industrialisation impulse of the 60s and 70s. Public spending grew, although without public works or capital financing occupying a central place.
Official balance sheets show that many state-owned enterprises operate systematically at a loss, sustained by direct transfers from the state. Instead of expanding production, they play a partial role: selling cheap inputs to other capitals, which is equivalent to a transfer of income rather than a true expansion of the productive base. The collapse of the aforementioned SIDOR, the steel and mining conglomerate, and the energy companies are clear examples of this dynamic.
The nationalisation of agricultural land followed a similar path. Most of it was not very fertile land and, once under state control, the fragmentation of property further reduced productivity. The result was unviable food production without state subsidies.
In short, the Chavista model recovered the presence of the State in strategic sectors, but without achieving that intervention translated into a true process of industrialisation.
Public spending is growing in absolute terms thanks to the increase in oil revenues, although its weight within GDP remains stable. A large part of these resources are used to finance state enterprises, cooperatives and experiences of workers’ control. However, far from promoting a process of industrialisation or expanding productive capacity, what is sustained is the reproduction of small capitals and the working class linked to them.
The wage earners who participate in these experiences, even when they appear as “owners” of the means of production, continue to be exploited under the conditions of individual capital. What does change is their level of consumption: the appropriation of income by these sectors generates an improvement in the purchasing power of this fraction of the workers. At the same time, public spending per capita, aimed at income transfers, reinforces this dynamic.
This phenomenon produces the appearance of a contradiction between the beneficiaries of social spending and the rest of the non-oil capital. The conflict between businessmen not linked to oil and the government, together with the support of working-class sectors that defend the transfers, feeds this political tension. But in economic terms, the cycle of appropriation of income does not end there: the consumption of workers and small capital is not an end in itself, but a mechanism that cheapens goods and labour power for the capital that uses them as inputs.
In other words, subsidies and the social wage make it possible to pay lower direct wages and reduce production costs, which translates into greater profits for the capital that appropriates that income. However, this process finds a limit: outside the oil sector, Venezuela lacks significant export capital. The productivity gap with respect to world industry prevents it from achieving competitiveness in foreign markets. Therefore, the realisation of income occurs mainly in the domestic market.The expansion of consumption, then, appears as a necessary condition to sustain this internal market. Public spending, more than an engine of industrialisation, functions as a mechanism for the redistribution of income that sustains small capitals and increases workers’ consumption, but that ultimately ends up benefiting the capital that manages to appropriate that labour force and those cheapened goods.
Overvaluation of the currency
The overvaluation of the bolivar appears as the main mechanism for appropriating land rent. Although it is presented as a market phenomenon, in reality it responds to a deliberate economic policy: to sustain the exchange rate through a monetary expansion that makes the dollar cheaper than the rest of the goods. At first, this mechanism hides its political nature. However, when the magnitude of appropriate income is no longer sustainable, the need arises to allocate these cheap dollars in a discretionary manner.It is there that exchange controls gain prominence. The existence of different dollar prices, more or less accessible in terms of bolivars, becomes a central tool. At the same time, the black market grows and expands over the total available foreign currency. In all cases, the origin of these dollars is the same: oil revenue, or foreign debt guaranteed by future crude oil exports.
In short, behind the exchange rate and monetary policy lies the same underlying problem: how oil income is distributed and appropriated. The cheap dollar, whether official or parallel, is not just a market price: it is the expression of an economic model that depends on land rent and that, at the same time, reveals its limits when that rent is not enough to sustain it.
Following the path of oil income through public spending allows us to understand how economic policies are intertwined with capital as a whole. But the debate does not end there: monetary issuance, inflation and the exchange rate are the other major issues that mark the discussion.
The dollars cheapened by the overvaluation of the bolivar have a clear destination: imports and “capital flight.” In this circuit, foreign industrial capital occupies the first place, followed by domestic industry and a wide range of commercial capitals. The lower participation of industry in GDP is reflected in a growing dependence on imported inputs, both for direct consumption and for production.
The appropriation of income via the exchange rate does not occur immediately. Beyond the complaints of overpricing and diversion of foreign currency, most importers need to sell their products in the domestic market to make this appropriation happen. The data show that, during Chavismo, the profits of U.S. manufacturing capital in Venezuela exceeded the average of their investments in the rest of the world. However, with the crisis, that trend was reversed, and they also began to register losses.
The profitability of foreign capital in Venezuela shows a paradox: although the flight of foreign currency represents an important part of the appropriation of oil revenues, those profits depend on operating within the domestic market. When profitability falls, the activity of that capital contracts and, in many cases, ends in its departure from the country.
The mechanism of appropriating rent via an overvalued exchange rate, far from promoting an industry oriented to the domestic market, ends up restricting its possibilities. With low wages and little investment, imports – and local production based on imported inputs – face a central problem: they do not have a sufficient market to carry themselves out.
The key, then, lies in the expansion of demand. And that demand can only grow thanks to the income that is redistributed through public spending, whether in the hands of small capital or the working class. In short, consumption financed by oil rent becomes an indispensable condition for sustaining the domestic market, even if it does not manage to solve the underlying problem: the lack of autonomous and competitive industrial development.
The relationship between consumption financed by oil revenues and exchange rate policy becomes more conflictive when crude oil prices fall. In this scenario, the illusion appears that what is in dispute are two different distribution models. In reality, what happens is that the capitals that benefited from the overvaluation of the bolivar see their access to dollars restricted and pressure the government to obtain them.Foreign debt, military and fall
The official response, especially after the 2009 crisis, was to resort to foreign debt, largely with China, guaranteed by future oil sales. This strategy allowed the crisis to be postponed, but the new fall in the price of a barrel once again exacerbated the shortage of foreign currency and called into question the policy of keeping the currency overvalued.
The government avoided devaluation at first, but increasingly restricted the sale of dollars while increasing monetary issuance, which deepened the overvaluation. The result was a process of concentration and centralisation of capital: small merchants were left out of the distribution, and the State assumed the import of essential goods for the working class. However, the processing of these inputs remained in private hands, which turned the State into an intermediary for the appropriation of rent.
With the continuous fall in oil prices, the cycle became unsustainable. Without access to dollars to import, many capitals stopped selling goods. Price controls, designed to ensure that foreign currency was destined for domestic consumption, ended up being powerless in the face of the dynamics of the crisis.
The dispute over a dwindling oil income led the Venezuelan government to tighten exchange controls and to rely increasingly on the military apparatus. Not only did it transfer public assets, but it also gave it control of part of the distribution of imported products. At the same time, it sought to avoid defaulting on payments with external creditors, maintaining high levels of spending financed with monetary issuance, which triggered inflation.
Dollars, increasingly scarce, were mainly destined for foreign assets. The overvaluation of the bolivar became unsustainable, and PDVSA, by liquidating foreign currency for a few bolivars, began to enter into crisis. Its own balance sheets showed that it was no longer only giving up income, but also part of its normal profits.
The fall in oil revenues, as an expression of the world crisis, sharpens the fight for its appropriation and reinforces the idea that relations between social classes are reduced to a mere correlation of forces. In Venezuela, this appearance gains more strength because land rent, being an extraordinary income, is perceived as directly contestable through state control.The narrative of the so-called “Economic War” stops at this appearance: it is presented as the defence of the majorities against the rentier sectors. But the opposition also operates under the same logic, blaming the government for all ills and proposing the free market as a solution. Thus, the supposed dispute between contradictory models is sustained, in reality, on abstractions.
In the debate on inflation and scarcity, both positions limit themselves to pointing out the external relationship between monetary issuance and price rises. Without being able to answer what causes what, they fail to recognise the unity between State and capital that is expressed in the combination of issuance, exchange controls, and appropriation of income through the overvaluation of the currency.
What’s next?
After the resounding fall of Hugo Chávez’s successor, Nicolás Maduro – from his kidnapping, removal from the country and subsequent imprisonment in the United States at the beginning of 2026 – Venezuela seems to be heading towards an economic reconversion that would take a further turn in its reproduction based on, once again, the appropriation of land rent in general and, especially, oil rent.
The exacerbated unviability of the previous forms fostered by Chavismo, added to the intolerable official authoritarianism over the masses and the ineptitude or impotence of local political oppositions, created an opportune space for Donald Trump to intervene explicitly, violently and illegally in the internal problems that cross society and the territory of the Bolivarian Republic.
In this sense, it is central to point out the reform to the Organic Law of Hydrocarbons, approved in express time by the National Assembly and days before the delegation of the Executive to Maduro’s former vice president, Delcy Rodríguez. Basically, the measure aims to allow and facilitate the participation of different national and foreign companies in oil exploitation. The essence of the legal reform revolves around what is expected when disbursing a commercial investment of magnitude: that the rate of return is within the average parameters in the productive branch and that it has sustainable guarantees of being met.
Of course, this opening falls squarely on the management power that the state-owned PDVSA held until recently in the administration of the Venezuelan oil business. In any case, the state oil company exercised, in a selective and discretionary manner, this type of commercial concession (the multinational company Chevron would be a paradigmatic illustrative example in terms of the commercial relationship with the Venezuelan State), which allows us to deduce that the US intervention operated to generalise and normalise, consequently, commercial relations in the Venezuelan oil branch.This determination, outlined directly by Trump, entails an increase in oil production, which today is at its lowest levels and in a situation of bankruptcy. This indicates – except for some particularities – that Venezuela is moving towards a productive model similar to that of the 80s and 90s, where greater investment by private capital, international prices tending to fall and concentrated local capital with higher productivity as the main appropriators of oil income predominate. Although, of course, everything remains to be seen as relations evolve between the United States (as guarantor of the new capital), the Chavista bourgeois-bureaucratic structure (still inserted in the levers of the State) and the local political opposition (representative of those capitals displaced during the Chávez and Maduro administrations).
Despite the recycling applied to the economy, the oil-producing country shows no signs that it has departed from the model and the way in which capital has historically reproduced itself since the last century in the countries of the American continent as producers of raw materials. In this sense, we are returning to another cycle of exports, obtaining rent and disputing this income by internal market capitals located below the average world productivity, the results of which – beyond the new turn of the cycle – are known and foreseeable.
If the USA takes over Cuba, it is going to be the same situation, and probably the USA will not do that either; they would prefer to invest in the tourism industry and let Americans travel to Cuba, which was Barack Obama’s plan, but donald Trump wanted to obtain the vote of the Cubans from Miami, at present cubans are losing all the legal protections from the USA governement which were mostly provided by democrats.
It is a country with a big state debt, and most of those loans have not been paid, or they are in default, and Petrocaribe has provided petroleum to several countries in the Caribbean. Even more, Argentina is one of the creditors of Cuba and that debt has not been paid. Petrocaribe carries huge debts from several Caribbean countries under the plan: power now and pay later for over a period of 25 years.
Cuba’s agreement was different; they paid the debt by sending doctors to Venezuela, professors, and military advisers. That is one of the reasons why Nicolas Maduro’s bodyguards were Cubans, and 32 of them were killed when he was kidnapped
The infrastructure is destroyed, the sugar cane production is low ( sugar from beet is cheaper to produce), and Russia and European countries are the leaders in beet sugar; factories and machinery are old, most factories are closed, and the system of monocrop destroyed the whole country, and the Soviets kept some type of colonialism.
They provided a lot of aid, similar to the Marshall Plan, but they were not reinvested in production.
This shows that state capitalism and nationalisation are not as effective as the left-wingers have been propagating for several years.s
Donald Trump and his oligarchs cannot claim sole ownership over the Venezuelan oil and assets;
China and Russia also claim ownership and contracts that the Venezuelan government must fulfil.
It is more bread and circuses for the coming election.
Some USA oil companies do not want to invest in Venezuela.
Disagreements between the Pentagon, the white house and the Venezuelan Senate are arising. Donald Trump has said that it is 100 years agreement, but the agreement said that it is for 25 years, and the Venezuelan Senate is saying that the agreement violates the Venezuelan constitution, and Pentagon is denying that they are obtaining benefits from the agreement
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