Translated by Federico Emanuele
The Origins of the Bond: The 1970s and 1980s
Venezuela is a Latin American country renowned for its vast oil reserves. While such a resource is undoubtedly advantageous for the economy of any nation, in Venezuela’s case, this apparent wealth has caused deep international divisions, particularly in its relations with the United States. Oil played a central role in the relationship between Venezuela and the United States for much of the 20th century. Following its discovery in the 1920s, the United States imported massive quantities of crude oil from Venezuela, and American oil companies held significant investment shares in exploration and production.
However, following the oil shocks of the 1970s, the Venezuelan government decided to nationalize the oil company PDVSA. Consequently, control of these resources passed almost entirely to the Venezuelan state, yet the United States remained an important economic partner by continuing its investments and imports of Venezuelan oil into the American market.
During that period, the country benefited significantly from rising oil prices, which guaranteed immense revenue for the state. This situation changed in the 1980s when an increase in oil supply caused a drastic price collapse, leading Venezuela into a profound economic crisis. The country depended exclusively on oil and lacked any form of economic diversification. Furthermore, the regime was characterized by widespread corruption, leaving it unable to sustain its debt and resulting in extreme poverty for the population.
This led to the 1989 Caracazo, a popular uprising that was violently suppressed. The aftermath was a progressive distrust of the neoliberal model and especially toward the United States, which nevertheless remained closely tied to Venezuelan oil resources.
These events paved the way for the rise of Hugo Chávez, who emerged on the national political scene in the late 1990s. He exploited the strong popular discontent toward traditional elites and deep social inequalities to establish a progressively authoritarian system.
The Rise of Hugo Chávez and Chavismo from 1999 to 2013
Hugo Chávez, a former Venezuelan army corporal, won the 1998 presidential elections with the promise of a government opposed to corruption and at the service of the poor, initiating what he called the Bolivarian revolutionary process.
Furthermore, the President strengthened control over the state oil company PDVSA, which became the primary source of revenue for the State and for financing the expansion of social programs known as the misiones, aimed at reducing poverty and illiteracy that had worsened over the preceding years. While this approach delivered positive initial social results, in the long term it relied on a heavy dependence on oil without adequate economic diversification. Additionally, the oil company was heavily politicized, and following a mass strike in 2002 and 2003, there was a massive layoff of approximately 18,000 skilled workers, resulting in a significant loss of efficiency.
All of these factors triggered the current tensions between the two countries, which escalated sharply following the death of Chávez in 2013 and the rise of Nicolás Maduro. Maduro inherited a nation struck by extreme poverty, corruption, and debt. Dependence on oil remained too high, the country lacked any alternative economy, and reserves were nearly exhausted. The situation deteriorated further with the first election of Donald Trump, who made Venezuela a symbolic case in his strategy against anti American governments and against the influence of China and Russia in Latin America.
U.S. Sanctions and the Shift of Oil to Other Markets
In response to the sanctions, Venezuela turned increasingly toward Asian markets, particularly China, which purchases a large portion of Venezuelan oil, approximately three quarters of all exports. These ties have become crucial for revenue in Caracas while creating economic and political dependencies on Beijing and further aggravating tensions with the United States As a result of this choice, direct exports to the United States dropped to nearly zero, while China became the primary importer of Venezuelan crude, receiving large quantities of oil and representing a radical shift in the balance of power.
Acute Tension in 2025: Tanker Blockades and Geopolitical Conflict
In 2025, with the return of Donald Trump to the White House, tensions between the United States and Venezuela rose to particularly critical levels, marking a new phase of escalation in the bilateral confrontation. U.S. policy toward Caracas became more aggressive, placing Venezuela within a broader strategy to contain governments hostile to Washington and Chinese influence in Latin America. In December 2025, the Trump administration ordered the blockade of sanctioned tankers entering and leaving Venezuela with the declared goal of economically striking the primary source of revenue for the country and increasing pressure on President Nicolás Maduro to accept a political transition or radically change the government line, causing a de facto oil embargo without a formal declaration of economic warfare.
China also intervened diplomatically, calling the United States measures unilateral bullying and a violation of the rules of international trade. Without announcing direct or military support for Caracas, Beijing emphasized how the Venezuelan case fits into the broader geopolitical clash with Washington over access to energy resources and global supply chains.
Economic and Geopolitical Impacts of the Crisis
In conclusion, it can be stated that the measures adopted by the United States contributed to a further contraction of Venezuelan oil exports, drastically reducing the state capacity to generate revenue and increasing dependence on alternative and opaque trade channels. These developments also affected international oil markets, increasing uncertainty over supplies and strengthening the role of China as the main buyer of Venezuelan crude.
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