Venezuela, a country in South America, has the largest oil reserves in the world. But over the last few years, the country has faced serious challenges. Corruption, bad management, and tough economic sanctions have made it hard for the country to produce and sell oil. The country’s oil production dropped drastically from 3.5 million barrels a day in 1999 to less than 400,000 barrels in 2020.
However, things started to change in 2022. Venezuela’s president, Nicolás Maduro, agreed to hold a democratic election. In return, the United States allowed the energy company Chevron to resume its oil activities in the country. This deal helped Venezuela’s oil production to start picking up again. Chevron, a US company, has joint ventures with Venezuela’s state oil company, PDVSA, and it quickly boosted production to 80,000 barrels per day in 2022. By 2024, the country’s oil production had even topped its 2019 levels.
The return of large tanker ships to Venezuela’s coast to pick up oil meant that the country’s oil exports were once again flowing, especially to the United States. While this was seen as a lifeline for the Venezuelan economy, many believe it came with a price.
Controversial Election: A Closer Look
While oil production was improving, Venezuela’s political situation remained tense. Maduro promised to hold a democratic election in 2022, but the election was widely criticized. The country’s National Electoral Council, which is controlled by Maduro’s supporters, declared him the winner, but many argue that the election was unfair.
US Strikes: Sanctions Imposed on Venezuelan Officials as Maduro Begins 3rd Term
Reports suggest that Maduro’s main opponent, Edmundo González, actually won the election by a large margin, based on tallies collected by the opposition. International observers, including experts from the United Nations, also confirmed that the opposition’s vote counts seemed legitimate. Despite this, Maduro was sworn in for a third six-year term in January 2025.
Many Venezuelans and international critics believe that the election was rigged and that Maduro’s government is now using the US oil permit to stay in power. They claim that the money earned from oil exports is helping Maduro keep his government running while ignoring calls for a fair election. This has led to calls for the United States to stop allowing Chevron to do business in Venezuela, but the Biden administration has not acted yet.
The Debate Over US Sanctions and Oil Export Permits
The US imposed strict sanctions on Venezuela several years ago in an attempt to force Maduro to step down. These sanctions made it very difficult for the country to sell oil to other countries. As a result, it sold its oil at much lower prices to countries like China and Russia. The government also began accepting payments in unconventional ways, such as cryptocurrency or Russian rubles.
In 2022, the US allowed Chevron to resume oil exports to the US as part of a deal to encourage democratic reforms in Venezuela. Critics, however, argue that the deal has done little to improve the political situation in the country. Instead, they claim that the money from oil exports is mainly benefiting Maduro’s government. Some estimate that Maduro’s government has earned around $4 billion from the Chevron deal since it started.
Venezuela’s Oil Production Declines Amid Sanction Threats
White House Faces Pressure Over Oil Permit Decision
The White House has received heavy criticism for allowing Chevron to continue exporting oil to the US. Many Venezuelan opposition leaders, along with some US lawmakers, have called for the permit to be canceled. They argue that the US should not be helping Maduro’s government while the country’s democracy remains in crisis. Despite this pressure, US officials have said that they are still reviewing their policy on Venezuela. President Biden himself mentioned that he didn’t have enough information to adjust the oil-related sanctions at this time.
Some people also warn that taking away the oil export permits could hurt ordinary Venezuelans the most. The revenue from oil exports helps the country maintain a lower exchange rate between its national currency, the bolivar, and the US dollar. If the sanctions were tightened further, it could lead to even more suffering for the Venezuelan people, many of whom are already struggling to survive.
While oil production in Venezuela has started to recover, the political situation remains in turmoil. The US government’s decision to allow Chevron to continue exporting oil to the US has sparked intense debate. Critics say that it’s allowing Maduro to hold onto power, while others worry that revoking the permits could make the economic situation worse. The debate over oil sanctions continues as Venezuela’s future hangs in the balance.
