By Ahmad Hassan
Venezuela’s massive oil sector, which drove the country and shaped the international energy market has come to a halt, with production at a minimum which can be attributed to years of corrupt mismanagement and sanction from the United States. Wells that once tapped the world’s largest crude reserves are now abandoned with fuel shortages forcing the country to a standstill. The collapse of the country’s oil sector has left behind an economy which is in crumbles, marking the end of the era where Venezuela was an energy powerhouse. A mitigating force in the foundation of the Organization of the Petroleum Exporting Countries in 1960, Venezuela aided Arab nations to take control of their vast oil wealth. In the years that followed, Venezuela was crushed with mountains of recurring debt and a period of financial crisis despite an abundant amount of oil revenues. The wealth did nothing to diminish corruption or inequality but instead worked to supplement its growth.
Venezuela’s downfall started when President Hugo Chavez took control of the reins, promising a revolution that aimed to put Venezuela’s oil to work for its vast majority of people who were living in poverty. He fired nearly 20,000 oil professionals, nationalized foreign-owned oil assets and allowed allies to plunder the oil revenues. He waged a war against the private sector, nationalizing thousands of private companies. Chávez created an image of an enlightened world leader, selling oil at a discount to many Latin American nations to buy good will. The industry further tumbled significantly last year when the United States accused Mr. Chavez’s successor and protégé, President Nicolás Maduro, of election fraud and enacted severe economic sanctions to force him from power. Today, oil production is the lowest it has been in nearly a century after sanctions forced most oil companies to cease operations in the country. The country’s oil partners and customers broke ties with it which saw output plunge drastically. Moreover, the sanctions imposed pushed the last of the remaining American oil companies out of the country.
Without drilling and its accompanying service companies, it is becoming increasingly difficult to maintain levels of production needed for a stable economy. In a period of stagnate global demand and growing environmental concerns, Venezuela’s oil is heavily polluting and expensive to process. The real cost of US’s economic sanctions is being paid by the people of Venezuela who are suffering tremendously as a result of decreased tourism, gasoline shortages and decimation of fish which has resulted from major oil spills in the area. Across Venezuela’s oil towns, the sticky black crude that once provided jobs and social mobility is now poisoning its residents’ livelihoods, pushing some to refer to it as the ‘devil’s excrement’.
Venezuela crisis in 300 words
Why are there two people claiming to be the legitimate president of Venezuela?