How Venezuela is benefiting from the global energy supply crisis

By Daniela Morales, 10th Grade

Russia is one of the world’s biggest producers of oil and natural gas, so it is no surprise that with the start of their war with Ukraine, the world’s energy supply began to crumble. Prices and the demand for oil and gas rose. In January 2022, a month before the war started, the cost of oil per barrel was $76. A month after the war, in March, the price had risen by $34, totaling $110 per barrel (GEP, 2022). The West and European countries pursued diplomatic efforts to show their discontent with Russia’s aggressiveness, including sanctions & bans on Russian oil imports. On March 8th, the US banned all imports of Russian oil, natural gas, and coal. The UK followed, and the European Union reduced its consumption of Russian oil by two-thirds, which by the end of 2022 escalated into an EU ban on all Russian oil imports. Countries placed these sanctions on Russia to undermine Moscow’s economy, show a united front, and disincentivize Russia from pursuing a long-term campaign on Ukraine. 

Meanwhile, their demand for new energy sources became undeniable. Countries began to use their special reserves, increase the production of energy at a national level, and look for other countries whose resources could be exploited (GEP, 2022). That’s where Venezuela kicks in. Venezuela is the country with the largest oil reserves in the world. In 2019, Venezuela was reported to account for 17.5% of the world’s oil reserves which hold more than 300 billion barrels of the product (NS Energy, 2020). However, in the past year, it has become difficult for Venezuela to exploit these resources due to the political socioeconomic crisis under Nicolás Maduro’s administration. The circumstances for Venezuela’s oil production became especially unfavorable after January 2019, when former president Donald Trump imposed sanctions that banned US companies from collaborating with Venezuela’s state-owned oil company (Redman, 2022). 

Russia’s downfall turned Venezuela’s predicament upside down. In September 2022, Nicolás Maduro addressed the international community at an event of the Organization of the Petroleum Exporting Countries saying that “Venezuela is ready and willing to fulfill its role and supply, in a stable and secure manner, the oil and gas market that the world economy needs” (Redman, 2022). The Venezuela Petroleum minister said that for this to happen, US sanctions would have to be lifted. On November 28th, US president Joe Biden began to lift some of the sanctions Trump had placed. He authorized a permit valid for six months, that enables Chevron (an American energy company) to extract and produce oil from the assets it holds in Venezuela (Nadig, 2022). 

Martinic ‘23 best describes the situation “Almost from the minute that Putin invaded Ukraine threatening the gas supply to Europe, Maduro’s sins as per the American Bible were forgiven”. The fact that the US was willing to negotiate with Maduro’s government serves to legitimize it. This is certainly good for Maduro, whose rule had taken a blow when Juan Guaidó announced the interim government. The lifting of sanctions by the US puts Venezuela “in a position to take the lead once more in Latin American geopolitics” (Martinic, 2023). But is it good for the people? The need for oil supplies motivated the negotiations between the US and Venezuela, but they were also inspired by Maduro’s unexpected soft power. 

Before the US announced Chevron’s renewal of operations, Maduro sealed negotiations with the interim government to create a fund for humanitarian aid managed by the United Nations. The US saw this action as a new start to democracy in Venezuela which made them open up to Venezuelan oil. Canada, the UK, and the EU have said they would consider their sanctions on Venezuela if the democracy of the countries improves. Regardless of whether Maduro’s intentions are genuine or not, if his soft power continues to attract international attention, it could be beneficial for the people of Venezuela, who have suffered from the country’s closed-down economy. 

Still, the international community should be wary of Maduro, since his administration is known to have ruined Venezuela’s oil company. When Maduro entered power, his sole focus was to remove workers who had operated the company under Hugo Chavez, with his trademark of political persecution. He fired thousands of workers, appointed unskilled people just because they were loyal to him, stopped disclosing the company’s finances, and gave the military control over the oil company. 30,000 employees had left by 2017 and between 2015-2018 oil production fell by 43.6% from what it was in 2013 (Ramírez, 2021). This won’t necessarily repeat itself, but we can take it as an example to have some insight into how destructive an unrestrained Nicolás Maduro can be. 


GEP. (2016, March 18). Russia-Ukraine War’s Effects on the Oil and Gas Industry. Retrieved January 22, 2023, from

Writer, S. E. N. S. (2021, June 24). Top ten countries with world’s largest oil reserves in 2019. NS Energy.

Redman, J. (2022, September 25). Nicolas Maduro Tempts West With an Abundance of Oil and Gas, Venezuelan President Wants Sanctions Lifted. Bitcoin News.

Nadig, S. (2022, November 28). US government lifts sanctions against Venezuela; Chevron resumes oil production. Offshore Technology.

Martinic, M. S. (2023, January 14). How Ukraine war reinvigorated Venezuela President Maduro. The Week.

Ramírez, R. (2021, November 8). The Venezuelan Oil Industry Collapse: Economic, Social and Political. IAI Istituto Affari Internazionali.


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