Venezuela's Oil Curse: From National Pride to Imperial Bargain

For generations, Venezuelans filled their gas tanks for almost nothing. Oil wasn't just an export commodity—it was a birthright, a source of national pride that funded free universities, subsidized public services, and attracted migrants from across the globe to a land of limitless possibilities.

Today, that same oil has become what many Venezuelans view as a curse. María Corina Machado, the country's popular opposition leader, recently welcomed Trump's military intervention with a telling admission: when asked why Americans should care about Venezuela, her first response was simply "Oil and gas."

The transformation reveals one of the most dramatic reversals in modern resource politics—how a nation that once celebrated petroleum as the foundation of its identity came to see it as the source of its downfall.

The Rise and Fall of a Petroleum Paradise

When Shell workers struck oil in Cabimas in 1922, the discovery launched more than half a century of prosperity. American companies arrived with country clubs and baseball, cutting deals with military strongmen while young intellectuals like Rómulo Betancourt dreamed of democratic control over the nation's wealth.

By the 1940s, Venezuela had negotiated the famous "el fifty-fifty" arrangement—American companies extracted the oil, but gave roughly 50% of profits to the Venezuelan state. The proceeds built schools, hospitals, and highways. Christian Dior opened his first Latin American shop in Caracas. The Concorde flew in weekly. Even the country's shanties were built with solid brick and concrete, made affordable by a strong currency.

But intellectual Arturo Úslar Pietri's warning in the 1930s to "sow the oil"—invest petroleum profits to cultivate other industries—went largely unheeded. Instead of diversification, Venezuela became utterly dependent on its underground wealth.

The cracks began showing after 1976, when the government nationalized the oil industry, creating PDVSA. For decades, the state-owned giant thrived as one of the world's largest oil companies. But when socialist Hugo Chávez took power in 1999, he replaced thousands of trained engineers with party loyalists and used oil as a diplomatic tool, lavishing petrodollars on allies like Cuba.

When Blessing Becomes Burden

The mismanagement under Chávez and his successor Nicolás Maduro was catastrophic. A country that fully depended on oil became ill-equipped to produce it. By 2020, Venezuela's refineries had crumbled so badly that the nation began importing gasoline from Iran. Production plummeted from millions of barrels daily to just 1 million barrels—barely 1% of global output.

María-Elena Pombo, an artist who creates "petroleum weavings" from oil-derived threads, represents this generational shift. Her father, an oil engineer, met her mother in the boomtown of Cabimas. She studied for free at an excellent public university funded by oil wealth. Today, that same university is in such disrepair that building roofs collapse.

"My generation is the last that benefited from oil," Pombo reflects—a sentiment echoed across Venezuela as desperate residents jury-rigged backyard refineries because gasoline became scarce and expensive.

The Imperial Bargain

Trump's January intervention, which captured Maduro and resulted in 32 Cuban officers' deaths, represents a return to the colonial-era dynamic that Betancourt once resisted. Yet many Venezuelans celebrated the strike. A poll by The Economist found that a majority "somewhat" or "strongly" supported Maduro's capture and were optimistic about economic prospects.

The reason is stark: fewer than 35% of Venezuelans thought their own government should continue running the oil industry. As Machado's economic adviser put it, the Americans will be "better clients" than the regime that squandered the nation's patrimony.

Trump has promised that Venezuela will provide 30-50 million barrels of oil to the U.S., with the regime already receiving $300 million from initial sales. American oil executives have been invited to the White House to discuss investment opportunities in what Trump called an effort to "benefit the people" of both nations.

The Onlookers' Dilemma

The arrangement echoes the original fifty-fifty deal, but with a crucial difference: Venezuelans today have little agency in their nation's fate. "We are just onlookers, not actors," economist José Guerra admitted. "We are just looking at what's happening, hoping for the best. We don't get to determine anything."

This powerlessness reflects a broader tragedy. Venezuela's oil story began with foreign companies making deals with strongmen while the people watched from the sidelines. A century later, after decades of nationalization and promises of sovereignty, the country finds itself in a remarkably similar position—except now many citizens prefer American control to their own government's management.

The challenges ahead are formidable. Political instability, infrastructure decay, and the regime's uncertain future make long-term investment risky. Power brokers may eventually splinter over the new arrangement, and there's no guarantee future American administrations will maintain Trump's approach.