The history of oil shows that resources alone don’t create power or prosperity; it’s the institutions, rules, and capacity to manage them that determine whether a country can transform geological wealth into lasting stability.
In the long history of oil, pivotal moments rarely arise from geology. Instead, they occur when political power, legal frameworks, and capital flows are restructured simultaneously. Today, Venezuela finds itself at one of these critical junctures: a nation with the largest proven reserves globally, yet an industry unable to turn that potential into economic stability, sustained production, or international confidence.
The current debate surrounding the future of Venezuelan oil doesn’t center on whether crude exists—there’s no doubt about that—but whether it can operate again as a functional system. A system where investment makes sense, production is technically feasible, export is logistically secure, and revenue collection isn’t reliant on political favors or opaque mechanisms. In other words, whether oil can cease to be a plunder and return to being an industry.
The true state of the industry: beyond the subsurface
Venezuela’s oil industry is now a striking case of accumulated decay. Two decades of disinvestment, mismanagement, politicization, and loss of human capital have left an aging infrastructure, with thousands of inactive wells, corroded facilities, and a fragmented service chain. Production, which once exceeded 3 million barrels a day, now lingers well below that mark, despite having a resource base that few countries can match: over 300 billion barrels.
But the problem is not solely technical. There exists a profound institutional liability: expropriations, international arbitrations, debts to contractors, commitments to creditors, and a history of unilateral rule changes. All these factors have turned the country into a territory where risk is not measured merely in percentage points but in the very possibility of executing a project without sudden interruptions.
For any global-scale energy company, the Venezuelan dilemma today is not whether the barrel can be extracted but whether capital can enter and remain untrapped.
A new redesign: marketing and external control
In this context, a strategic approach from the Trump administration emerges, breaking with the traditional oil business logic in Venezuela: separating production and marketing from internal political control. The central idea is for companies to operate under a scheme where the main relationship isn’t with the Venezuelan state, but with a supervision, compliance, and financial control architecture designed outside the country—specifically in the White House.
This approach directly addresses the core of Venezuela’s historical problem: uncertainty over the destination of revenues. For years, oil flowed, but the money was lost in discounts, intermediation, corruption, or parallel schemes. The result was an industry that produced without generating stability and a state that received revenue without building institutions or improving the quality of life for the Venezuelan people.
The new design seeks the opposite: selling crude at market prices, reducing artificial discounts, capturing the full value of the barrel, and managing those revenues through verifiable mechanisms—trusts, segregated accounts, audits—that limit political discretion. Practically speaking, it aims at shifting the risk from sovereign promise to a credible financial control system.
Sanctions, flows, and energy realignment
Another key element of the debate is the implicit recognition that for years, Venezuelan oil circulated despite sanctions imposed on Pdvsa. It did so with steep discounts and through opaque routes that benefited intermediaries and geopolitical actors with their own agendas. Rather than stopping the flow, restrictions distorted it.
The current shift proposes a different use for that instrument: not to block oil, but to channel it. Allow controlled sales at full price under transparent schemes where the differential between market price and realized price doesn’t dissolve into opacity. In the energy industry, whoever controls marketing controls the system’s pace. And in times of crisis, pace is power.
All under pressure, only one with maneuverability
From a strategic perspective, the Venezuelan moment is characterized by crucial asymmetry. The internal leadership faces a severe fiscal and social crisis. International companies bear historical losses and frozen assets. External actors operate under conditions of precarious legitimacy. In this game, only one player—the Trump administration—holds the power to slow down or accelerate the process without suffering immediate internal impact.
This asymmetry explains why what seemed politically unviable yesterday is now accepted. When the alternative is collapse, cooperation ceases to be ideological and becomes functional. Oil thus becomes an instrument to win time: political time, economic time, and social time.
Three operational moments: from early flow to equilibrium
The plan proposed by the White House doesn’t promise a perfect reconstruction from the get-go. It proposes something more pragmatic: moving in overlapping stages.
The first moment is stabilization. Here, the priority is to generate cash flow quickly. At this stage, companies with ongoing presence and experience in mature fields have a clear advantage. It’s not about major discoveries but optimization, maintenance, secondary recovery, and operational efficiency. Each additional barrel bought with incremental investment reduces fiscal and social pressure.
The second moment is financial and institutional reorganization. With cash flow underway, space opens up to renegotiate debts, order liabilities, and rebuild a minimal relationship with creditors and financial organizations. It’s not yet a complete structural reform, but sufficient reordering to reduce paralysis.
The third moment is scaling. Here, long-term projects come into play: developing new areas, replenishing reserves, large-scale investments, and horizons of several decades. This step requires stronger rules, contractual stability, and institutions that endure political cycles. Without them, long-term capital won’t arrive.
The legal anchor: why rules matter more than rhetoric
One of the most interesting debates revolves around the legal framework. The Venezuelan experience shows that the greatest risk isn’t always direct expropriation, but permanent uncertainty. When no one knows which rule will apply tomorrow, investment freezes.
This leads to the proposal of relying on historical legal frameworks like the Hydrocarbons Law of 1943, known by major companies, as a temporary starting point. Not out of nostalgia, but as a bridge to credibility. A transparent framework, with stability clauses and auditable contracts, can be more valuable than a new law lacking trust.
The real enemy of oil development today isn’t the lack of formal sovereignty, but the absence of predictability.
Security and discipline: the silent factor
No energy strategy survives if the operating environment is volatile. Sabotage, focused violence, or absence of territorial control raise costs, delay timelines, and erode trust. Internal security isn’t a separate issue from oil; it’s an integral part of the barrel’s cost.
Without effective public order control and minimal institutional discipline, even the best-designed financial architecture loses operational viability. Consequently, any factor obstructing the stabilization process will eventually be contained or displaced by the system’s own survival logic.
Tutelage or transition?
The final dilemma is inevitable. An external control scheme for oil flows could be interpreted as tutelage. But it can also be seen as a necessary stabilization phase after institutional collapse. Energy history shows that in extreme moments, countries have accepted extraordinary mechanisms to rebuild productive capacity and credibility.
The key difference lies in the outcome: if control translates into stronger institutions, clear rules, and eventual functional autonomy, it will have achieved its goal. If it perpetuates as a substitute for the state, it will have failed.
Conclusion: oil buys time, not legitimacy
Oil can stabilize an economy, but it doesn’t replace politics or law. Venezuela faces a narrow window: to use its main resource to rebuild a functional energy system and, from there, create space for a real institutional transition.
This time, the challenge isn’t finding crude; it’s building the rules that allow the barrel to finance the future and not repeat the past. The history of oil teaches us that resources don’t save countries; it’s the institutions that govern them. Venezuela is on the brink of learning this once again, from the very start.
@antdelacruz_