The modern era of Venezuelan oil began with the first commercial discoveries in the Lake Maracaibo basin in the 1910s and 1920s. By the 1930s, under the dictatorship of Juan Vicente Gómez, the country was transformed from a sleepy, agrarian backwater into a major global exporter. Foreign capital, primarily from the United States and Europe, poured in, creating an enclave economy with little connection to the rest of the country. However, a pivotal shift occurred in 1976 with the nationalization of the oil industry, creating Petróleos de Venezuela, S.A. (PDVSA). For a time, PDVSA was a model state-owned enterprise, lauded for its technical expertise and profitability. This golden age was supercharged by the oil shocks of the 1970s, when petrodollars funded massive public works, subsidized food and fuel, and created a middle class. The phrase "Saudi Arabia of Venezuela" was born, capturing the nation’s giddy belief in an eternal, prosperous future.
When global oil prices crashed in 2014, the Venezuelan house of cards collapsed. The economy, unable to produce anything of value besides increasingly scarce oil, entered a death spiral. Hyperinflation erased wages and savings, shortages of food and medicine became chronic, and an estimated seven million citizens fled the country—the largest displacement crisis in the Western Hemisphere. Even the oil industry itself, the supposed lifeline, crumbled. Production fell from over 3 million barrels per day in the late 1990s to barely 700,000 by the early 2020s, a collapse due to underinvestment, corruption, and a brain drain of technical talent. el petroleo en venezuela
Yet, beneath this veneer of success, the seeds of dependency were deeply rooted. Oil became the single engine of the Venezuelan economy, crowding out agriculture, manufacturing, and other vital sectors. The national currency, the bolívar, became chronically overvalued, making imports cheap and exports expensive, a phenomenon known as "Dutch disease." This reliance meant that when global oil prices fell, the entire nation’s economy convulsed. The state, accustomed to distributing oil rents, lacked the institutional capacity to raise taxes or manage a diversified economy. The social contract became simple and fragile: the government would provide cheap gasoline and subsidized goods in exchange for political loyalty. The modern era of Venezuelan oil began with