Venezuela’s Transition: Privatizing the Oil Industry

Following the US’s removal of Maduro from power, Venezuela’s oil sector has entered a new phase under an interim administration. The shift has prompted swift economic changes, with the government actively courting foreign investors despite lacking full democratic support.

In recent days, airlines like Iberia have recommenced flights to Caracas, and American Airlines has declared intentions to re-enter the country. Meanwhile, Paraguay is pushing to restore Venezuela’s standing in the Mercosur trade bloc, a move its new minister of industry and commerce, Marco Riquelme, highlighted during a March press event. Success in this effort could also influence the European Union, which finalized a broad trade pact with Mercosur for May 1, pending approval.

“This is one of the initiatives we’d like to advance during Paraguay’s pro-tempore presidency,” Riquelme stated.

Venezuela, rich in oil reserves, has seen a notable rise in crude exports, reaching over 1.1 million barrels per day in March—a first since September. This marks a reversal of the global decline in oil production, which OPEC attributed to the US-Israeli conflict with Iran. Analysts predict the trend will persist, driven by renewed international interest in the sector.

Chevron’s announcement to boost operations in Venezuela signals growing confidence. The company’s agreements with PDVSA involve asset exchanges, granting it substantial control in Petroindependencia and access to the Orinoco Belt. Delcy Rodriguez, the acting president, emphasized that these deals would prioritize public welfare, stating, “The revenue generated will directly benefit the Venezuelan people and create shared value for both nations.”

However, economic uncertainty remains. Ronald Balza, a UCAB professor, warned that external oversight of oil deals is limited. He noted the difficulty in assessing progress due to inconsistent payments from the US. “Forecasting prices, jobs, or budget allocations is nearly impossible without transparency,” he explained.

Ricardo Hausmann, a Harvard economist, described the current government as a dictatorship. “If Trump claims control over Venezuela, he must ensure the freedom and security of Maria Corina Machado,” he said. Machado, who has been in exile since a contested election, was awarded the 2025 Nobel Peace Prize, which she presented to Trump as a gesture of gratitude on behalf of Venezuelans.