Caracas: Venezuela sits on the largest proven oil reserves in the world. Still, the country remains trapped in poverty and is crippled by the highest inflation rate anywhere on the planet. Despite its oil wealth, Venezuela is counted among the poorest nations today.
In early September, tensions with the United States deepened further. On September 2, the U.S. Navy launched a missile strike on a Venezuelan boat, killing 11 civilians. Washington later claimed the vessel was carrying narcotics.
The attack came at a time when a wider U.S. military campaign was going on targeting South American drug cartels, with warships and surveillance aircraft stationed near regional waters. Following the strike, U.S. President Donald Trump publicly accused Venezuela of trafficking.
The episode marked another flashpoint in a long and troubled history between Caracas and Washington, shaped by oil, politics and security disputes.
A Giant Oil Reserve
Venezuela held an estimated 303 billion barrels of proven crude reserves by 2023. No other nation comes even closer to it. Saudi Arabia follows with 267.2 billion barrels, then Iran with 208.6 billion and Canada with 163.6 billion.
Together, these four countries account for more than half of the world’s oil wealth.
Venezuela’s reserves are so vast that they are more than five times greater than those of the United States. America holds around 55 billion barrels, ranking ninth globally.
Despite this enormous advantage, Venezuela earns less than one-fifth of U.S. oil revenues.
Why Venezuelan Oil Sells Cheap
Most of Venezuela’s crude lies in the Orinoco Belt, a massive 55,000-square-kilometre stretch in the country’s east. The oil here is heavy, dense and sulfur-rich. Unlike lighter crude from the Gulf states, it is sticky and costly to refine. Extracting it requires advanced technology and heavy investment. Because of its poor quality and high production costs, Venezuelan crude fetches a lower price in the global market compared to other exporters.
A Struggling Industry
Oil production in Venezuela is dominated by the state-owned company Petróleos de Venezuela, S.A. (PDVSA). Once considered a regional powerhouse, the PDVSA is now crippled by outdated infrastructure, chronic underinvestment, corruption scandals and international sanctions. The company cannot operate at full capacity, leaving much of the country’s massive reserves untapped.
Exports That Barely Register
The Observatory of Economic Complexity (OEC) reported that Venezuela exported just $4.05 billion worth of crude oil in 2023. The figure pales in comparison with leading exporters. Saudi Arabia shipped $181 billion, the United States $125 billion and Russia $122 billion.
Beyond crude, Venezuela sells only small amounts of refined products such as gasoline and diesel.
Despite holding the crown as the world’s top oil-rich nation, Venezuela continues to battle hunger, shortages and one of the most unstable currencies anywhere in the world. Its vast underground wealth remains locked away, while its people struggle to survive one of the harshest economic crises of the modern era.