📊 Venezuela's Oil Potential and its History
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We’re trying something a bit different today, and focusing on a single, relevant topic: Venezuela and its oil. Good news to light readers — less words! Please let us know what you think of this format.
Venezuela’s Oil Industry 🇻🇪🛢
The United States recently announced a broad easing of oil sanctions against Venezuela, which is home to the largest petroleum reserves in the world. The move came shortly after the country’s autocratic leader, President Nicolás Maduro, agreed to a deal with the opposition to hold internationally moderated free and fair elections next year. This could mean an end to Venezuela’s decade-long political crisis…and a rekindling of the once-booming Venezuelan economy.
Venezuela owns 18% of all of the world’s oil. At its peak this century, the country produced 3M+ barrels daily. Nowadays, it outputs about as much oil as Ecuador, which has roughly 3% of the reserves of its Andean peer.
How did Venezuelans end up here?
In 1922, Venezuela’s oil reserves — the largest globally — were discovered, setting the country on an enormously prosperous path. Foreign companies were required to pay 50% of their profits to the government in 1943. By 1950, Venezuela was the world’s 4th-wealthiest nation per capita. It continued being considered Latin America’s crown jewel for decades later thanks to favorable oil prices in the postwar period. In turn, the government spent lots on social programs like healthcare, education, and food subsidies. Workers enjoyed the highest wages in Latin America. Amid this boom, President Carlos Andres Perez nationalized the oil industry and created Petróleos de Venezuela (PDVSA), a state-run petroleum producer.
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