Relations and exchanges between the countries are determined more by the economic convenience of each country than by any other factor. Throughout history, Venezuela and the United States have been trading partners, especially in the area of hydrocarbons. Its roots go back to the beginning of the 20th century, with an evolution marked by political and ideological factors up to the present day.
As early as 1887, Venezuela exported asphalt from Lake Guanoco, used in the main avenues of New York and Washington through the “General Asphalt” company, a subsidiary of the New York and Bermudez Company. These exports laid the foundations of the hydrocarbon business between both countries, although with time they decreased as national oil production grew, which allowed Venezuela to consolidate itself as a safe and reliable supplier for North America, until the arrival of Hugo Chávez to power.
Despite the situation we have experienced over the last two decades, Venezuela still has many advantages to initiate a rapid recovery of our competitive position in the northern market.
Firstly, Venezuela has the largest proven oil reserves on the planet, estimated at more than 300 billion barrels, which represents a long-term potential as a massive and stable supplier. In addition, its geographical proximity to the United States significantly reduces transportation costs and times compared to other sources of oil, such as those in the Middle East or Africa.
Most Venezuelan crude oil is heavy, which makes it compatible with CITGO and other companies’ refineries in the United States. Importantly, it is a strategic priority for the United States to diversify its energy sources and reduce its dependence on geopolitically unstable regions. A stabilized Venezuela, with a revitalized oil industry, could offer an attractive and reliable alternative to less stable or more distant suppliers.
A review of the trade history between the two countries
Venezuela became a major oil producer during the 1910s. U.S. companies such as Standard Oil (later Exxon) and Gulf Oil were pioneers in the investment and development of the Venezuelan oil industry. With the drilling of the Zumaque I well in 1914, large-scale production began with a capacity of 264,000 barrels per day.
Between the 1920s and 1930s, Venezuela consolidated its position as one of the world’s main oil producers and exporters, with the United States as its most important destination. U.S. oil companies operated under a legal framework of concessions, and Venezuela contributed with its oil to the industrial and automotive development of that country. In 1930, production amounted to 141 million barrels per year, making Venezuela the second largest producer and the world’s leading exporter of crude oil.
During World War II, Venezuela played a strategic role in becoming a reliable supplier to the Allies, guaranteeing a continuous flow of crude oil vital to the war effort. This cemented its reputation as a reliable energy partner for the United States and its allies.
In 1948, during the presidency of Rómulo Betancourt, a partial reform of the Income Tax Law was carried out, where a greater participation and control of the oil industry by the State was established. It is the so-called “fifty-fifty” which means fifty-fifty, that is, half of the profits for the operators and half for the Venezuelan State. This year production stood at 1,340,000 barrels per day.
The OPEC (Organization of Petroleum Exporting Countries) was created in 1960 and Venezuela was one of its founding members. In 1976, under the presidency of Carlos Andrés Pérez, the oil industry was nationalized and Petróleos de Venezuela S.A. (PDVSA) was created. Despite this structural change, the trade relationship with the United States was maintained, and the country continued to be a reliable, secure and natural supplier, partly due to its geographical proximity.
During the energy crisis of the 1970s, Venezuela also played a prominent role, especially during the Arab oil embargo of 1973. While the Arab OPEC countries cut off supplies to the West, Venezuela opted to maintain its production and guarantee supplies to its traditional customers, including the United States. This decision reinforced its image as a reliable and politically independent supplier.
Progress and rupture
During the 1990s, the trade relationship deepened with the so-called “Oil Opening”, through which Venezuela strengthened its position as one of the main energy partners of the United States. However, as of the year 2000, with the arrival of the Hugo Chavez regime, a process of deterioration in bilateral relations began, affecting thousands of Venezuelan industries that depended on the US market, including the oil industry. The rupture deepened during Nicolás Maduro’s term in office. In 2000, Venezuela produced more than 3 million barrels per day, of which 1.5 million were exported to the United States.
During this period, the anti-U.S. discourse became a constant of the regime and its allies. A policy of market diversification was adopted, with greater rapprochement with countries such as China, which implied higher costs and longer transportation times. As a consequence, the country’s oil revenues were significantly reduced. Starting in 2017, the government of Donald Trump imposed sanctions to pressure the Maduro regime in view of the systematic human rights violations and the illegitimacy of the Venezuelan government. In 2019, the import of Venezuelan crude oil was banned; in 2023, production fell to historic lows.
In 2025, the oil relationship between Venezuela and the United States is practically non-existent in terms of direct oil trade. Sanctions imposed by the United States, although subject to review or possible conditional easing, remain in place for the most part. Venezuela no longer represents a significant supplier of crude oil to the United States. The Venezuelan oil industry faces serious difficulties in terms of production, infrastructure and operational capacity, which makes it unable to meet any substantial demand, even if the sanctions were fully lifted. The current relationship is characterized by deep distrust and a highly complex political environment.
Rebuilding an advantageous relationship
Political change in Venezuela leading to a democratic and stable government could open the door to a rebuilding of the economic and oil relationship with the United States. This process would require a series of complex but feasible legal and diplomatic steps.
Lifting of sanctions (Executive Orders):
Most of the economic and oil sanctions imposed on the Venezuelan regime by the United States have been established through Presidential Executive Orders. A new U.S. administration, or the current one with a new policy towards Venezuela, could revoke or modify such orders. This could occur progressively or completely, depending on political developments in Venezuela.
Rebuilding the oil relationship will depend on confidence building and strong political will, accompanied by legislative and regulatory changes that restore legal certainty and create an attractive environment for investment and trade between the two countries.
