Photograph by Nathaniel St. Clair

Following the dramatic seizure of Venezuelan President Nicolás Maduro on January 3, 2026, Trump’s comments about taking control of Venezuela’s oil industry quickly triggered accusations of “neo-imperialism”. Critics argued that pledges to share profits with Venezuela were little more than cover to protect the interests of America’s major oil companies. Yet despite the allure of Venezuela’s reserves, many of those major oil firms have been notably cautious, citing uncertainty over the country’s political trajectory and the durability of legal and financial protections.

Venezuela sits atop more than 300 billion barrels of proven crude reserves, constituting roughly 17 percent of the global total. This is more than Saudi Arabia’s reserves, which is the world’s most recognizable oil power. The two countries have comparable population sizes, yet Saudi citizens rank among the wealthiest in the world, while Venezuela has become one of the poorest countries in the Americas.

The contrast can be partly explained by geology. Most Venezuelan oil is considered heavy and sour, meaning it is dense and high in sulfur. Extracting, transporting, and refining this oil is more expensive and technically demanding than the Saudis’ light, sweet crude, which flows more easily and requires less processing.

Saudi Arabia’s oil is also easier to access. Much of it lies close to the surface and on land, lowering extraction costs. Venezuela’s deposits are, meanwhile, often deep underground or offshore, complicating extraction and transportation.

Despite these constraints, Venezuela was one of the world’s leading oil producers by the mid-20th century and a major supplier to the United States. Oil revenues supported a relatively prosperous, urbanized society, and following the leverage gained by producer states after the 1973 oil shock, there was both elite and public support for greater national control over the industry. In 1976, the Venezuelan government nationalized the oil industry, creating Petróleos de Venezuela, S.A. (PDVSA).

The nationalization process was orderly, with U.S. and European oil companies compensated and the transition carefully negotiated. For years afterward, PDVSA operated with significant autonomy and technical competence, maintaining ties with foreign firms and continuing to develop its industry.

The politicization of PDVSA, however, proved fatal for it. After a period of market opening in the 1990s, Hugo Chávez was elected as the president of Venezuela in 1998 on a platform built around redistributing oil wealth and reasserting state control over the economy, particularly the oil sector. He quickly........

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