With the largest proven oil reserves in the world, Venezuela could be one of the wealthiest countries in Latin America. After all, its 303.2 billion barrels of estimated oil reserves are worth $22 trillion, according to the United States Department of Energy Country Analysis Brief on Venezuela.

Venezuelans have heard for decades about the nation’s vast reserves, but for many, that wealth has rarely, if ever, translated into better living conditions.

Today, Venezuela is the poorest country in South America, with a GDP per capita of $3,600, according to OPEC Annual Statistical Bulletin. Approximately 71 percent of Venezuelan households live in poverty and 67 percent live in extreme poverty, according to studies.

Venezuela has been in the global spotlight since U.S. President Donald Trump ordered the arrest of Nicolás Maduro, the nation’s leader. Trump stated U.S. oil companies will “go in, spend billions of dollars, fix the badly broken infrastructure, oil infrastructure, and start making money for the country.”

Speaking to journalists in December, he sounded quite different as he laid claim to Venezuelan oil on behalf of oil companies in the U.S. “They took all of our energy rights,” he said in response to questions about Venezuela from a journalist.

“They took all of our oil from not that long ago and we want it back. But they took it. They illegally took it,” Trump said.

It raises a crucial question for Venezuelans: Whose oil is it anyway?

Venezuela’s oil has been controlled by the state-owned company Petróleos de Venezuela, S.A. since 1976. The company was created after the nationalization of the oil industry after concerns about foreign actors’ management of the key source of Venezuelan wealth.

Trump is not the first global figure to lay claim to Venezuelan oil. He follows in a long line of local and foreign investors, politicians and corporations that have tried to take advantage of Venezuela’s primary source of revenue.

Most revenue from oil exports in Venezuela has been used to pay off the $54 billion debt the Caribbean country owes to China, according to University of Southern California Associate Professor of Business Michael Mische. The author of the 2024 economic policy study Not all oil is created equal, Mische said China fronted Venezuela the money, in return for oil shipments.

As part of the loan, China received at a discount of between 40 and 50 percent on the market price of the oil that it has received from Venezuela since 2007, according to Mische. In his analysis, it was revealed these oil-for-loans agreements involved multiple loans structured to be repaid over more than 20 years through crude shipments. But as Venezuela’s production declined and the country fell behind on payments, the terms were repeatedly renegotiated.

The discount, according to Mische, “was staggeringly large… They'll get behind on the payments so that the terms will change. And the terms always become more favorable to the person who you owe the money to than the person who owes the money,” in this case, China.

Russia and Iran have also benefited from Venezuela’s poor deal-making, Mische said. Russia’s presence in Venezuela was strong enough for Moscow to build a runway in Venezuela for its military bombers.

As for Iran’s involvement in Venezuela, it provided technical support, equipment, and expertise to repair equipment, USC Professor of Chemical Engineering and Materials Science Muhammad Sahimi said. Iran also swapped its refined oil for Venezuela's crude oil, bypassing U.S. sanctions. Sahimi said Iran helped Venezuela refine its oil to make it lighter and suitable for export, receiving payment in Venezuelan gold.

Iran, in a recently disclosed 2020 Venezuelan Defense Ministry memo, shows that the government of ousted Venezuelan President Nicolás Maduro’s explored a $400 million deal to buy ballistic missiles from Iran in 2020, according to Politico . The deal ultimately collapsed later that year, under economic pressure and opposition from the United States.

Top 10 Countries with the Largest Reserves of Oil

While many oil-producing countries fail to share the wealth with their people, Venezuela has struggled far more. According to the OPEC Annual Statistical Bulletin, Venezuela is the country with the most crude oil reserves in the world, with 303 billion barrels, but out of the 12 countries mentioned in the report, Venezuela has the third lowest GDP per capita.

The nation’s natural resources have made it a focal point for political maneuvering, and competing visions over control of the country. According to Mische, Venezuela’s oil sector generated hundreds of billions of dollars in revenue over the past two decades, but it did not reach or benefit the Venezuelan people anywhere near as much as it should. Instead, it was channeled toward the country’s ruling class.

“What we know is, subsequent to the departure of Maduro, Venezuelan production has gone up,” Mische said. “It's gone up considerably and to the favor of the Venezuelan people… Venezuela oil is now being placed on the market at spot prices.”

After Maduro’s arrest by U.S. forces in Venezuela on Jan. 3, Venezuela’s sanctioned oil sector was once again allowed by the U.S. to re-enter global markets. Venezuela’s oil is beginning to re-enter global markets under more standard pricing. Under sanctions, Venezuelan crude was often sold $14–$21 per barrel below market standard price.

“Now, have things changed since January 3rd in Venezuela? Yeah, they have… But there's still a lot to do and a lot of things have to happen,” said USC Professor of Clinical Management and Organization Marco Aponte-Moreno, who is Venezuelan. “Delsy Rodriguez is the acting president and the Chavista regime still in power.”

Miguel Tinker Salas, a Venezuelan who is also an Emeritus Professor of History at Pomona College, said his country needs to reclaim its sovereignty. Venezuelans should be able to manage their own internal affairs, he noted, including who they should sell oil and other resources to.

Beyond oil, Venezuela is also rich in minerals. The Orinoco Mining Arc is home to major deposits of gold, bauxite, diamonds, coltan, and iron ore. Studies estimate that Venezuela’s portion of the arc alone could contain up to $2 trillion in mineral potential, making it one of Latin America’s richest mineral zones.

“It's very clear that what the Trump administration wants is access to Venezuela's mineral wealth,” Tinker said. “But that mineral wealth” — like the nation’s oil — “needs to be put to the service of the population, not a select few. And not in Washington.”

Aponte said he believes that if it was possible to put Venezuela's natural resources at the service of its people in the past, however distant, then there is a way to recreate or improve on the old model.

“I feel that now under the U.S. supervision — I don't find a better word for what's going on right now — the money… one of the objectives [is] for the money to go to the people,” Aponte said.

WHEN OIL CHANGED VENEZUELA

Venezuela wasn’t always an oil-producing country. The country relied mainly on cash crops, such as coffee and cacao exports, during the 19th century.

But even then, Venezuelans were aware of the presence of oil in the soil, according to Tinker. Some Indigenous communities used oil to caulk their boats, and for lamp fuel going back hundreds of years.

“They knew about it when the Spanish [conquistadors] asked them what is that substance that's coming out of the ground, they referred to it as the excrement of the devil,” Tinker said.

Venezuelans were already manufacturing and processing oil in the 1870s. La Petrolia del Táchira, in Táchira state, was a location where oil seeped out of the ground after an earthquake. Tinker said Venezuelans attempted to process their own oil, selling kerosene, lubricants, among other products.

Venezuela’s economy shifted from agriculture to oil in the early 20th century, following the first successful commercial oil drilling, which led to the arrival of foreign companies in 1914. That event triggered the oil boom of the 1920s, rapidly transforming the economy into one dominated by petroleum.