The United States' Aspirations for Venezuela's Oil

Summary

Podcast Summary: The Daily – "Can Trump Make Venezuelan Oil Great Again?"

Date: January 13, 2026
Host: Natalie Kitroeff (The New York Times)
Guest: Anatoly Khmernaev (NYT’s in-house expert on Venezuelan oil)

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Overview

In this episode, The Daily examines President Trump's recent intervention in Venezuela, explicitly aimed at reviving the country’s oil sector and re-opening it to American interests after decades of tensions, nationalizations, and economic turmoil. Natalie Kitroeff and expert Anatoly Khmernaev untangle the complicated history of Venezuelan oil—including America’s role, resource nationalism, decades-long decline, and the immense challenges facing any comeback attempt.

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Key Discussion Points and Insights

Why is Trump Focused on Venezuelan Oil?

• Geopolitics and Wealth: Venezuela represents the world’s largest oil reserves, making it a strategically irresistible target for a U.S. president with a resource-driven worldview.
• Historical Ties: The U.S., as the world’s biggest producer, sees a natural connection with Venezuela (“a natural tango... drama, cooperation, competition, conflict”—Khmernaev, 02:38).

Trump’s Justification: “Our Oil”

• Trump and allies publicly argue the U.S. has a rightful claim (“We're taking back what was taken from us. They took our oil industry. We built that entire oil industry…”—Trump, 01:10).
• Senior adviser Stephen Miller asserted, “American sweat, ingenuity and toil created the oil industry in Venezuela. Its tyrannical expropriation was the largest recorded theft of American wealth and property.” (04:33)
• Commentary: The rhetoric is “wild and exaggerated and incendiary, but it does contain a grain of truth.” —Khmernaev (05:06)

The Origins: How Americans Built Venezuela’s Oil Industry

• 1920s Boom: U.S. companies and workers helped launch Venezuela’s oil infrastructure, fundamentally shaping its cities, lifestyle, and economy (05:31–07:06).
• “After the influx of American workers, American capital, oil production starts to rise rapidly.” —Khmernaev (07:57)
• Urban Transformation: Cities like Maracaibo modeled after Houston, with American-style suburbs and amenities.

Tensions and “Resource Nationalism”

• Exploitation Sentiments: As wealth poured out to foreign firms, Venezuelans pushed back, birthing “resource nationalism,” a movement asserting state ownership of natural resources (09:24).
• OPEC Formation: Venezuela was instrumental in OPEC’s founding to control oil output and prices globally (09:58–10:34).
• First Nationalization (1970s): The industry became state-run under PDVSA; foreign firms compensated and allowed joint ventures (11:11).

Boom, Bust, and Increasing Dependency

• Post-Nationalization Prosperity: The oil bonanza propelled Venezuela to wealth and modernity but deepened dependency on a single commodity (13:54).
• Crash of the 1980s: Oil prices tanked, revenue collapsed, public spending dried up, and instability set in (14:14).

The Orinoco Gamble and “La Apertura”

• Facing crisis, Venezuela invited foreign firms back to tap hard-to-extract Orinoco crude during the 1990s. PDVSA receded, global giants returned (15:45).
• “The oil starts to flow...but the economic stability never comes back. People feel that the oil industry no longer serves the national interest.” —Khmernaev (15:54)
• Discontent set the stage for Hugo Chávez’s rise.

Hugo Chávez’s Populist Takeover

• Campaign Promise: “Venezuelan oil belongs to Venezuelan people.” (18:35)
• Chávez ousted PDVSA technocrats, politicized the company, and delivered patronage and welfare, but at the cost of expertise and efficiency (19:47–22:16).
• “It’s hard to think of a cultural, social activity or a product that...has not been sponsored or sold by PDVSA...” —Khmernaev (21:32)
• 2007 Nationalization: Forced foreign firms to cede control; ExxonMobil and ConocoPhillips sued for lost assets, Chevron stayed (22:55–24:47).

Collapse Under Maduro

• Chávez’s successor, Nicolás Maduro, presided over catastrophic decline: hyperinflation, mass emigration, societal breakdown (25:08–27:27).
  • “Venezuela’s once-wanted oil fields become a scene out of a dystopian movie.” —Khmernaev (26:11)

U.S. Pressure and Shift to (Stealth) Privatization

• Trump’s sanctions deepened the crisis; Maduro’s successor Delsy Rodriguez covertly allowed foreign firms more control (28:20–29:08).
• Production improved slightly but remains a shadow of past highs.

What Would It Take to Revive Venezuela’s Oil?

• Investment Need: Tens of billions required to rebuild degraded infrastructure, with easy fixes exhausted (29:49).
• “You cannot just turn the spigot back on…once something decays...it often damages the geological receptacle...it is extremely expensive and time consuming to repair.” —Khmernaev (30:09)
• Western Oil CEOs’ Attitude: Cautious—Chevron is wary after past seizures; ExxonMobil deems Venezuela “uninvestable” under current conditions (31:55–32:42).

Essential Preconditions for Revival

• Political Stability: New leader Rodriguez rules precariously; risk from armed factions and internal rivals is high (33:09–34:03).
• Legal Guarantees: Companies wary after prior expropriations and uncertainties about future U.S. administrations (34:30–34:59).
• Market Uncertainties: Clean energy transition clouds the long-term value of massive new oil investments (35:17).

If the Comeback Succeeds: U.S. Gains

• Economic Influence: Lower global oil/gas prices, helping American consumers at the pump—a prime Trump concern (36:39).
• Geopolitical Power: Control over vast reserves weakens rivals (Russia, China) and improves U.S. leverage worldwide (37:12–38:17).

Is U.S. Control Sustainable?

• Current arrangements depend on U.S. military deterrence and an amenable interim government; history suggests this “puppet” setup is unstable long-term (38:17–39:59).
• “History shows... such ambitious grandiose long-term plans rarely turn out the way they’ve been envisioned.” —Khmernaev (39:43)

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Notable Quotes & Memorable Moments

• Trump’s Justification:

  • “We're taking back what was taken from us. They took our oil industry. We built that entire oil industry...” (01:10, attributed to Trump’s public remarks)

• Stephen Miller on U.S. entitlements:

  • “American sweat, ingenuity and toil created the oil industry in Venezuela. Its tyrannical expropriation was the largest recorded theft of American wealth and property.” (04:33)

• Anatoly Khmernaev on American influence:

  • “Venezuela basically enter[ed] modernity through the prism of how American oil workers saw the world.” (07:23)

• Khmernaev on Chávez’s populist refashioning:

  • “It's hard to think of a cultural, social activity or a product that you buy that has not been sponsored or sold by PDVSA at the time.” (21:32)

• Chevron on Risk:

  • “We've had our assets seized there twice. And so you can imagine to reenter a third time would require some pretty significant changes...” (32:10)

• ExxonMobil’s Reluctance:

  • “If we look at the legal and commercial constructs...in place today in Venezuela... it's uninvestable.” (32:35)

• Khmernaev on infrastructure challenges:

  • “The thing about the oil industry, Natalie, is that you cannot just turn the spigot back on. Once something decays... it often damages the geological receptacle holding the oil. And it's extremely expensive and time-consuming to repair…” (30:09–31:01)

• Khmernaev on historical lessons:

  • “History shows...such ambitious grandiose long-term plans rarely turn out the way they've been envisioned.” (39:43)

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Timestamps for Key Segments

• 01:10 — Trump’s claim: “They took our oil industry...”
• 02:38 — Why Venezuela’s oil is geopolitically important
• 04:33 — Stephen Miller’s “largest theft of American wealth” comment
• 05:31–07:06 — How Americans built Venezuela’s oil industry
• 09:24 — Rise of resource nationalism
• 09:58–10:34 — Venezuela’s role in founding OPEC
• 11:11 — First nationalization and creation of PDVSA
• 15:45 — “La Apertura”: inviting foreign companies back in the ‘90s
• 18:35 — Chávez’s campaign and “oil for the people”
• 19:47–22:16 — Chávez’s purge of PDVSA, politicization, and consequences
• 22:55–24:47 — 2007 wave of nationalization and U.S. company exodus
• 26:11 — Collapse of Venezuela’s oil sector, dystopian decay
• 28:20–29:08 — The “stealth privatization” under Delsy Rodriguez
• 29:49–31:01 — Immense rebuilding investment needed
• 31:55–32:42 — Chevron and ExxonMobil representatives’ remarks
• 33:09–34:03 — Political uncertainty under new leadership
• 35:17 — Energy transition’s impact on oil investment calculus
• 36:39–37:12 — U.S. economic and geopolitical gains from oil resurgence
• 39:43 — “Grandiose long-term plans rarely turn out as envisioned”

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Conclusion

The episode provides a comprehensive, clear-eyed look at the tangled legacy of Venezuelan oil—once a symbol of global modernity and American partnership, later a story of control, populism, decline, and collapse. Now, as Trump attempts to orchestrate a dramatic comeback favoring U.S. business, The Daily leaves listeners with the sobering reminder that neither history nor the challenges of today make a simple “make oil great again” scenario likely or sustainable.

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For anyone who hasn’t listened, this summary captures the episode’s deep dive into Venezuelan oil’s past, present, and uncertain future—with the kind of narrative sweep, analysis, and skepticism characteristic of The Daily’s best journalism.

Transcript

[Nick Kristof]

This is Nick Kristof. I'm an opinion columnist for the New York Times. And I'm proud that for more than 100 years, the Times has conducted an annual appeal to raise money for charitable organizations. Times journalism is fundamentally about vetting the truth, and in this case, about vetting organizations and selecting some of the best to help create opportunity and overcome hardship. I hope you'll consider donating to the New York Times Communities Fund. To learn more, go to nytimes.com NYTfund thank you.

[Natalie Kitroeff]

From the New York Times, I'm Natalie Kitroweff. This is the Daily. In the days since deposing Nicolas Maduro, President Trump has given several justifications for his dramatic action in Venezuela.

[Unidentified Commentator]

Number one, the drugs are pouring into the country. You know that. Number two, the people are pouring into the country were.

[Natalie Kitroeff]

But the thing Trump is most focused on, the thing he keeps pointing to as central to his ambitions, we're going.

[Unidentified Commentator]

To take back the oil that frankly we should have taken back a long.

[Natalie Kitroeff]

Time ago is oil.

[Unidentified Commentator]

We're taking back what was taken from us. They took our oil industry. We built that entire oil industry, specifically.

[Natalie Kitroeff]

Opening Venezuela's vast oil fields to American companies.

[Unidentified Commentator]

They stole our assets like we were babies. And the United States said absolutely nothing about it. So now we're doing everything about it.

[Natalie Kitroeff]

Today, my colleague Anatoly Khmernaev explains the history behind Trump's claim that this is our oil and what it would really take to get it back. It's Tuesday, January 13th. Anatoly, we're here today to talk to you about Trump's interest in Venezuelan oil. And the reason that we are again turning to you is that you famously, for some of us former Latin America correspondents spent nearly a decade in Venezuela covering the country when Maduro first came to power. And you are a student of and our in house expert on Venezuelan oil. So welcome back to the show.

[Anatoly Khmernaev]

Thanks for having me again.

[Natalie Kitroeff]

Natalie, let's just start with a basic question, which is why is Trump so focused on Venezuelan oil?

[Anatoly Khmernaev]

Venezuela is a quintessential petrostate. It is arguably the first petro state. It is a nation that has been built by oil that defines itself through oil. And if you American president who sees the world through prism of natural resources, who sees the world through the geopolitics of energy and control of energy resources, then Venezuela is your natural target. As my colleague Rebecca Elliot wrote, you have a country that is today the world's largest oil producer, the United States, targeting the country with the world's biggest oil reserves. Venezuela it is, in a way, a natural relationship, a natural tango, of course, shaped by drama, shaped by cooperation, by competition, by all sorts of conflicts. But it is a collision of two countries that are in different ways shaped by oil.

[Natalie Kitroeff]

Right. And it's difficult, obviously, to get inside the president's head, but we do have his public statements on this. Right. He's gone out and offered a very explicit justification for some of this, which is he's saying, this is going to make the US And Venezuela a lot of money.

[Anatoly Khmernaev]

Absolutely, yeah. For us as reporters, one of the most shocking and unexpected elements of this whole drama is just how explicit, how direct Trump is being about his motives. The central, the driving aspect of this whole campaign against Venezuelan President Nicolas Maduro is about oil. This is the crucifix of this entire issue.

[Natalie Kitroeff]

And the other thing that he's been saying, other than this is about oil, we can make money on this, is that this is rightfully ours, that the US Has a claim to this oil. So walk me through those statements. What are he and his allies saying there really?

[Anatoly Khmernaev]

Well, this is perhaps the most contentious and complex parts of the story that Trump is saying that the US Is reclaiming what's rightfully theirs, what's rightfully America's. And this sentiment has been echoed by his officials. You know, his top adviser, Stephen Miller, has said, and I'm quoting, American sweat, ingenuity and toil created the oil industry in Venezuela. Its tyrannical expropriation was the largest recorded theft of American wealth and property.

[Natalie Kitroeff]

Right. I remember that post from Miller. It was quite strident and direct.

[Anatoly Khmernaev]

Yeah, it's really wild and exaggerated and incendiary, but it does contain a grain of truth. And to understand where he comes from, you have to go back all the way back to the beginning of Venezuela's oil industry a century ago.

[Natalie Kitroeff]

Okay, take me there. Tell me that story. I want to understand where the grain of truth in that statement really is.

[Anatoly Khmernaev]

When Columbus discovered Venezuela 500 years ago, he thought he'd found an earthly paradise.

[Narrator/Documentary Voice]

Venezuela was a land of mountains, plains, and jungles, and with only a handful of Spanish towns and villages.

[Anatoly Khmernaev]

So before the oil was discovered, Venezuela was sparsely populated, underdeveloped, full of poverty, and very little infrastructure.

[Narrator/Documentary Voice]

The first Europeans came to Venezuela seeking gold. They later found black gold. Crude oil. On December 14, 1922, an oil well being drilled near Lake Maracaibo blew out at the rate of 100,000 barrels a day.

[Anatoly Khmernaev]

Oil was discovered in Venezuela at the very beginning of the 20th century, and the industry really takes off in the 1920s, a boom that was propelled a few years later by mass migration of American oil workers.

[Narrator/Documentary Voice]

Foreign oil companies operate the wells, and.

[Anatoly Khmernaev]

Those American oil workers, they started building towns built in the American way, with American grids, suburban houses, schools, baseball, social activities, churches. And those towns gradually grew into cities and then metropolises, again imitating American way of life.

[Narrator/Documentary Voice]

Oil workers like Juan Ramirez, with their high salaries and many company benefits, have achieved a way of life which is very similar to that of workers in the most advanced countries of Europe and North America.

[Anatoly Khmernaev]

Local employees, which are hired by American oil companies, become the backbone of a new middle class.

[Narrator/Documentary Voice]

The Ramirez family lives in a modern community planned and built by the oil company. The oil money has been spent on public buildings, skyscrapers, broad avenues and highways.

[Anatoly Khmernaev]

The streets became highways. The social clubs became malls. The suburban houses became skyscrapers. Venezuela's oil capital, Maracaibo in the west, is known here as the Houston of Venezuela.

[Narrator/Documentary Voice]

The hope is that the future holds more jobs, better living standards, better homes.

[Anatoly Khmernaev]

Venezuela basically entering modernity through the prism of how American oil workers saw the world.

[Narrator/Documentary Voice]

To Venezuela's people, oil is everything.

[Natalie Kitroeff]

Wow. It's interesting. You're saying basically that the Americans left a huge mark on Venezuela, not just seen in the oil industry itself, but all over the country. It's funny. What you're saying about the architecture does ring true. I haven't spent that much time in Caracas. But it's right that it looks more like an American capital than you'd see elsewhere in Latin America.

[Anatoly Khmernaev]

That's right. And after the influx of American workers, American capital, the oil production starts to rise rapidly. And in the 1950s, Venezuela was the world's largest oil exporter. It is making tremendous amounts of money. And Venezuela's dictator at the time, Marcus Paris Jimenez, he uses that oil wealth and pours it into the country's infrastructure. He starts building massive tunnels, bridges, highways. Venezuela becomes filled with this massive grandiose projects that put it way ahead of its peers in Latin America. It becomes one of the richest countries in the region, arguably one of the richest countries in the world. And it starts to attract migration from all across the world, from other corners of Latin America, from Asia, from Southern Europe, from Lebanon. Venezuela becomes this melting pot of cultures, all drawn to the wealth provided by the oil industry that is fueling the economy, fueling the country's development, and reshaping it as this mecca of modernity at a region that was still extremely poor and backward at the time.

[Natalie Kitroeff]

So obviously, there is a clear benefit for Venezuelans in all of this, they're reaping rewards from this boom. But they're also seeing that there's a bunch of foreign companies, right, making a lot of money off of selling what is their main natural resource. So as good as those times may have been, was there any tension there?

[Anatoly Khmernaev]

There was. There's a growing number of Venezuelans began to question the status quo, which gives the bulk of the wealth towards the corporations. And Venezuela really becomes the driver of a movement that ended up reshaping the world. A movement called resource nationalism.

[Natalie Kitroeff]

And what is that? What's resource nationalism?

[Anatoly Khmernaev]

It's a concept that states that ultimately natural resources belongs to the citizens of the state, that the country's national wealth belongs to its people and not to the corporations that are exploiting these resources.

[Natalie Kitroeff]

And when is this taking hold? Just give me a sense of time here.

[Anatoly Khmernaev]

So in late 50s, a Venezuelan statesman called Juan Pablo Perez Alfonso travels to the Middle East. He goes to the other oil producing nations and convinces them if we bond together, if we stick together, we can assert our sovereignty, we can bring more wealth to our people, and we can minimize the influence of corporations in our society. And this becomes opec, which is basically a group of oil nations that together agree on how much oil is produced between them, thereby setting the prices and setting the pace of a global economy.

[Natalie Kitroeff]

The idea behind this association, which it sounds like Venezuela is key to helping create, is that these countries are going to agree on how many barrels they want to be in the supply and that that will affect prices, giving them some control over the revenues they're reaping from this production.

[Anatoly Khmernaev]

That's right. And the second crucial pillar of resource nationalism is ownership of resources. So it starts a chain of legal reforms that assert that what lays underground belongs to the states.

[Narrator/Documentary Voice]

Estade.

[Anatoly Khmernaev]

Los venezolanos. And it culminates in Venezuela in the 1970s when a censor left pro US president at the time, Carlos Andreas Perez, decides to nationalize Venezuela's oil industry.

[Natalie Kitroeff]

And what does the nationalization of Venezuela's oil actually look like? How does that play out?

[Anatoly Khmernaev]

So Carlos Santras Perez chooses a relatively conciliatory path. This is a cold war. Venezuela is deeply alive, the United States. So he starts talking to the oil companies. He works out an agreement where the oil companies are compensated and are offered contracts under which they can continue making a lot of money and nationalization creates a company called Petroleos de Venezuela, a state old company known here universally as Pedevesa, which now owns all of Venezuela's oil.

[Natalie Kitroeff]

And how do Venezuelans feel about this.

[Anatoly Khmernaev]

Nationalization becomes the source of national pride. It becomes one of Venezuela's foundational myths. It becomes an event that divides Venezuelan history and before and after, with Venezuelan people asserting control over their wealth, over what they consider their birthrights, the oil under the ground. And this company, Vivesa, grows and is working together with foreign oil companies. And it's using some of the revenues to train Venezuelans in the oil industry. It is using the money to send Venezuelans on scholarships to world's best universities. And it becomes a fairly effective modern company that is at the cutting edge of a technology. At the time, it was a place where Venezuelan middle class, where Venezuela's professional class had formed itself and becomes the cornerstone of Venezuelan society. And oil prices are at their peak. The country is flooded with money, with much of that wealth going into education and alleviation of poverty.

[Natalie Kitroeff]

Anatoly, you've described this long tale of history where American oilmen came in, worked the fields in Venezuela, got this incredible industry up and running. And it sounds like Venezuelans really actually gained a lot from the partnership and from the nationalization that came from it. They got this setup where their national company runs things, where it's working with foreign companies and it's fueling pretty remarkable development.

[Anatoly Khmernaev]

That's right. It was a blessing, but it was also a curse. Venezuela became addicted to oil. Its economy became extremely dependent on oil. And then in the 80s, the global economy changed and the oil prices starts to go down. The price of a barrel drops from $40 to $10.

[Natalie Kitroeff]

Wow, that's pretty massive if you're depending on this.

[Anatoly Khmernaev]

It's a massive decline, Natalie. And the cracks begin to appear in Venezuela's economic model. Venezuela goes from a period of abundance, where the state lavished money on a welfare state, to a period of scarcity where money is scarce, where public spending is scarce, corruption scandals grow and people become increasingly disillusioned and angry with the system.

[Natalie Kitroeff]

So what does the Venezuelan government do?

[Nick Kristof]

Do?

[Natalie Kitroeff]

How do they respond to this crisis?

[Anatoly Khmernaev]

The government's solution to this anger is more oil. They turn to a remote region of the country called the Orinoco Oil Belt, which contains the world's largest oil reserves. But these reserves are locked in sludgy tar, but is extremely difficult to process. And it requires cutting edge technology to make it sellable, which Venezuela does not have at the time, but American corporations do. So Venezuelan government turns to foreign investors, turns to foreign multinationals to help them unlock the wealth hidden in this remote region. And they call this process apertura. Petralera, the oil opening. It is naturally one of the most ambitious oil investments program in the world at the time. And Pirevesa, the state oil company that has been at the heart of Venezuelan economy, the heart of its public life, takes a backseat and allows foreign companies to take the lead on the development of these reserves and take the lead on monetizing the profits from these reserves.

[Natalie Kitroeff]

And does it work? Does that arrangement actually yield anything?

[Anatoly Khmernaev]

The oil starts to flow, production starts to increase rapidly and reaches more than 3 million barrels from about 1 1/2 million by 1998. But the economic stability never comes back. People feel that the oil industry no longer serves the national interests and people start to look for solutions elsewhere. And it fuels the rise of one of the most important politicians in modern Latin American history.

[Unidentified Commentator]

Viva Venezuela.

[Anatoly Khmernaev]

Viva Civumdor. An army officer called Hugo Chavez.

[Natalie Kitroeff]

We'll be right back.

[Lori Leibovich]

Hi, this is Lori Leibovich, editor of. Well, at the New York Times, there's a lot of misinformation in the health and wellness space. But at the New York Times, no matter what the topic, we apply the same journalistic standards to everything we write about, whether it's the gut microbiome or how to get a good night's sleep, even if we're talking about something like is it bad for me to drink coffee on an empty stomach? Everything that our readers get when they dig into a well article has been vetted. Our reporters are consulting experts, calling dozens of people, doing the research. It can go on for months so that you can make great decisions about your physical health and your mental health. We take our reporting extra seriously because we know New York Times subscribers are counting on us. If you already subscribe, thank you. If you'd like to subscribe, go to nytimes.com subscribe.

[Natalie Kitroeff]

Okay, let's talk about who Hugo Chavez is and what his role is in this moment.

[Anatoly Khmernaev]

So Hugo Chavez grew up in a poor family in Venezuela and Savannah. And like many working class children in Venezuela, he saw his chance to succeed in life in the armed forces. He joins the military academy and rises rapidly through the ranks using his sharp intellect and charisma. At the same time, he becomes influenced by nationalist and socialist ideas floating around during the Cold war. And in 1998, He launches a political campaign that takes the country by storm, capturing support from all segments of the Nison society.

[Natalie Kitroeff]

And what's his message in this campaign?

[Anatoly Khmernaev]

His message is Venezuelan oil belongs to Venezuelan people. And he rallies against Pervesa, the state oil company. But he sees has become Basically a fiefdom of Western interests, a fiefdom of Venezuelan elites that have lost touch with the people, that are serving by our own interests, that have turned Pera into a little country club for the rich and the privileged. And Chavez wins 56% of a popular vote. Many Venezuelans rejoice when he becomes president in 1999.

[Natalie Kitroeff]

And after he wins, how does he make good on those campaign promises?

[Anatoly Khmernaev]

So his first big project is redistribution of Venezuelan's wealth. And that means restructuring completely the way PDWESA works, the cash cow of the economy. And this sets Chavez on a crash course against the company's management, the high priests of Venezuelan oil industry, the Western educated technocrats that have been running Venezuelan oil industry for decades. In 2002, Chavez goes on national television, pretends to be a soccer referee, blows the whistle and fires Pervest's senior executives.

[Narrator/Documentary Voice]

Offside.

[Anatoly Khmernaev]

Offside, he says, you are offside.

[Narrator/Documentary Voice]

When Chavez replaced the oil company's top executives with political appointees, some of whom.

[Unidentified Commentator]

Were radical Marxists, there was a management revolt.

[Anatoly Khmernaev]

And this fuels nationwide protest that rocked the country throughout 2002. This is a crucial moment in Venezuela's history because many of the country's middle class realize that this is a power grab. These people who have for generations seen as a Perevesa, as a model of national development, they see it being taken apart for a political project without any consideration for accountability or democratic norms. And the year culminates with a massive oil strike. Per Vesta. Workers paralyze the country, exports stop, the country runs out of gasoline, the country is in chaos, and and tens of thousands of workers, including most of the company's skilled workforce, walk out of a jobs, basically paralyzing the Venezuelan economy.

[Natalie Kitroeff]

And how does Chavez respond?

[Anatoly Khmernaev]

He fires thousands of Venezuelan workers, primarily managers and skilled workers, people that supported the strike, but also people that made the company tick, people that made it competitive and efficient. And he turns the company into just another tool of his political populist campaign. And all of a sudden this company, but it's known for its technological expertise and efficiency, starts opening supermarkets, providing daycare, hosting theater performances.

[Natalie Kitroeff]

Well, like theater sponsored by pdvesa, like sponsored by your state oil company.

[Anatoly Khmernaev]

It's hard to think of a cultural, social activity or a product that you buy that has not been sponsored or sold by Pervesa at the time. It's literally becomes the provider of social services and welfare in the country. And corruption also increases. Many of government insiders, many people close to Chavez become big oil industry contractors, providing PSA with services and goods that are overpriced in return for political loyalty.

[Natalie Kitroeff]

So this state owned company that was such a source of national pride, this crown jewel has now been gutted basically of the expertise and the technical know how that made it work, that made it so functional for so long.

[Anatoly Khmernaev]

That's right. Its revenues fall and production begins to decline. And Chavez needs to look for other sources of revenue. It needs to look for other sources of wealth that fund his populist projects. So in 2007, he launches another wave of nationalizations. He takes aim at the oil opening via Pertura. Remember those international oil companies that have spent billions to refine the TARI crude locked in Orinoco oil belt.

[Narrator/Documentary Voice]

The Chavez government has told its foreign partners that they must agree by May 1 to give Peda Vesa a 60%.

[Natalie Kitroeff]

Stake in those joint ventures or see them nationalized altogether.

[Anatoly Khmernaev]

Well, Chavez decides that these projects now belong to the state. He forces the companies to give up control of his projects and give state majority share. We will never give this, our wealth, our nation, to the United States empire. Even if the Venezuelan oligarchs scream or if the United States and its multinational companies attacks us. And two major oil companies, companies that became ExxonMobil and Kanoka Philips, refuse.

[Lori Leibovich]

ExxonMobil wants to be compensated for the investments it lost when Chavez nationalized the country's oil venture.

[Anatoly Khmernaev]

They leave Venezuela and start a series of legal processes that end up awarding them billions of dollars in damages that these companies continue to claim have been stolen from them by the Chavez government.

[Natalie Kitroeff]

So unlike the first wave of nationalization in the 1970s, which you said led to a relatively functional partnership between the Venezuelan government and foreign oil companies, this wave is a lot more contentious. And I wonder, is this what Trump and his aides are referring to when they talk about Venezuela stealing from American oil companies? Like is this the moment that they're referring to?

[Anatoly Khmernaev]

We don't know. But it is the moment when Venezuela came closest of defrauding American companies, came closest to taking away the money that American companies have claimed is rightfully theirs. But there was an exception. Chevron, an oil company that decided to accept much less profitable terms, knowing that in the long term they stand to win. The country had the biggest oil reserves in the world. So even if there was a small chance that those reserves would fall into companies hands, it would create a massive amount of wealth for the corporation and its shareholders.

[Natalie Kitroeff]

Okay, so at this point, pdvesa is a shell of its former self. The American companies are all gone except for Chevron and Venezuela. Venezuela is now sitting on this massive oil reserve without really the capacity to realize the potential, the infrastructure, the institutions, they just don't really exist anymore.

[Anatoly Khmernaev]

That's right. And when Chavez dies in 2013, the rickety populist economic system that he has built falls apart like a house of cards. Oil prices fall and with it the Venezuelan economy. Starting 2014, it enters a prolonged period of economic decline, of collapse, but ended up been the biggest economic crisis in modern history outside of war zone. After 17 years of socialist rule, Venezuela, one of the world's largest oil producers, has the world's highest inflation rate.

[Natalie Kitroeff]

With basic necessities scarce and inflation skyrocketing, some reports suggest it could go as high as 700%.

[Anatoly Khmernaev]

And that crisis spreads to the oil industry. It becomes a shell of itself. Wells dry up, investments dry up, and people are scrambling around. Oil apart the infrastructure, taking apart pipelines, the fences, the equipment for scrap. Venezuela's wanted oil fields become a scene out of a dystopian movie.

[Natalie Kitroeff]

It's kind of wild to imagine when you just think about how much money and time and effort went into building all of that stuff. To have it basically be torn apart and sold for parts. I mean, things had to have been really bad at that point.

[Anatoly Khmernaev]

People are struggling to survive. Natalie.

[Natalie Kitroeff]

The people of Venezuela are suffering from violence. A world record of daily murders and random kidnappings.

[Anatoly Khmernaev]

Malnutrition rises massively. Many people are skipping a meal.

[Natalie Kitroeff]

I'm very annoyed. Only God knows what we're going through.

[Anatoly Khmernaev]

Because in truth, no one is helping us.

[Natalie Kitroeff]

The situation is so severe, the New York Times reports it's even making it hard for doctors to keep newborn babies alive.

[Anatoly Khmernaev]

Millions of people emigrate from a country. It is difficult to imagine the scale of collapse that the country has experienced, losing more than three quarters of its economic activity. Without a war, without social unrest, without a major natural catastrophe, all caused by the populist policies instituted by Hugo Chavez and continued by his successor, Nicolas Maduro.

[Natalie Kitroeff]

And this is a huge blow, obviously, for a movement that has made its name selling itself as a leftist movement that cares about the people, that is working to prevent this kind of poverty from making people suffer. So what's the response?

[Anatoly Khmernaev]

So initially the government tries to just truck along, repressing protests and doubling down on the failed policies that have brought the country to its economic knees. But then President Trump starts his first term and he launches a campaign to depose Mr. Maduro. And his biggest blow was sanctioning Venezuelan oil industry, basically making it illegal for Venezuela to sell its oil to the west. This paralyzes Venezuelan oil experts and paralyzes economic activity, deepening the crisis. And it forces Maduro to change tack. He entrusts one of his top lieutenants, Das Rodriguez, to fix the economy.

[Natalie Kitroeff]

Now the leader of Venezuela.

[Anatoly Khmernaev]

Now the leader of Venezuela, and she embarks on a long campaign to steady the economy. And the pillar of her campaign is to change the oil industry. And she does it by launching stealth privatization. On paper, the oil continues to belong to Venezuelan people, and the state has the dominant role in Venezuelan oil projects. But in practice, under the secret contract signed by Delsey, foreign companies gain control of Venezuelan oil fields. They get to make over decisions about them, and they're given a bigger share of its project's profits. Investment picks up and so does the oil production. And by the end of 2025, the country is producing 1.2 million barrels per day, a fraction of where it was before Chavez took power, but a significant improvement to where the country was just a few years ago.

[Natalie Kitroeff]

Okay, so at present you're saying things are certainly not as dire as they were. But in general, the story that you've told overall paints a picture of extreme decay in this industry, in the infrastructure around it. An industry that is very difficult to just start back up overnight when you start to lose it, given how much it takes to make it work. Trump is now saying, after having captured Maduro, after supporting Delsey, now as the leader, that US Companies are going to revive Venezuela's oil industry. What would it take to actually do that? Right now?

[Anatoly Khmernaev]

It would take tens of billions of dollars of investment. Delta Rodriguez was able to reverse the decline and edge up the production by taking the low hanging fruits, by fixing things that were easier to fix. And many oil executives and analysts say that these low hanging fruits are coming to an end. That for Venezuela to significantly improve its oil production, to take it to a whole other level, would require a massive scale investment that the country has not had for decades. But there is good news for the oil companies, and that is that everyone knows that oil is the hard part. The exploration has already been done. The difficulty is getting it out of the ground. Remember that most of Minnesota's oil reserves lie in the sludgy area called the Orinoco Oil Belt. And the cutting edge multibillion dollar plants that were used to process them have largely been decayed and disintegrated. The thing about the oil industry, Natalie, is that you cannot just turn the spigot back on, that once something decays, once something falls apart, it often damages the geological receptacle holding the oil. And it's extremely expensive and time consuming to repair the infrastructure, to repair the reservoirs and make the oil flow again.

[Natalie Kitroeff]

And is doing that actually appealing to American oil executives? Like, do they actually want this challenge?

[Anatoly Khmernaev]

That is the main question right now, Natalie. Just how committed the companies will be to taking another bet in Venezuela, taking another battle in the country that has burned them badly in the past. So there's still a lot of unknowns, but the cost of sitting on the sidelines is massive. At stake are literally the world's largest oil reserves. Just last week, Trump met the executives of some of the biggest Western oil companies to talk about investment in Venezuela.

[Unidentified Commentator]

The plan is for them to spend, meaning our giant oil companies will be spending at least $100 billion of their money, not to government's money.

[Anatoly Khmernaev]

And the broad takeaway was that while Trump made big promises touting 100 billion investments in the country, companies themselves, short interest.

[Chevron Representative]

For more than a century, Chevron has been a part of Venezuela's past. We are certainly committed to its present, and we very much look forward as a proud American company to help it build a better future.

[Anatoly Khmernaev]

But remain cautious.

[Chevron Representative]

We have a very long history in Venezuela. In fact, we first got into Venezuela back in 1940s. We've had our assets seized there twice. And so you can imagine to reenter a third time would require some pretty significant changes from what we've historically seen here.

[Anatoly Khmernaev]

And very tellingly, ExxonMobil, one of the world's largest oil companies, and the company that left Venezuela in 2007, said that.

[Chevron Representative]

If we look at the legal and commercial constructs and frameworks in place today in Venezuela today, it's uninvestable.

[Anatoly Khmernaev]

Venezuela today is uninvestable. Underlying the challenges facing Trump's plans towards the country's oil industry.

[Natalie Kitroeff]

Let's get into some of those challenges. What are the conditions that you think need to be present for these companies to come back and to make the kind of sustained investments that you would need to see for the potential of Venezuela's oil fields to actually be realized?

[Anatoly Khmernaev]

So, first of all, you have to keep in mind that Maduro has been gone for just about a week. The new leader that has replaced them, Delsa Rodriguez, she's basically ruling through the guns of American warships trained on her internal enemies. The country is filled with armed groups that have been loyal to Maduro. The country is filled with weapons. The country is filled with different political factions that oppose Delsey Rodriguez and her policies. And the risk of unrest and violence is significant.

[Natalie Kitroeff]

What you're describing, Anatoly, is a situation in which Delsey formally holds power, but she's also contending with these internal rivals and particularly figures in the political spectrum that have a lot of power, not only over the armed forces in Venezuela, but over armed groups within the country that if she doesn't control them and if her rivals do, could cause a lot of trouble.

[Anatoly Khmernaev]

That's right. She's under pressure to generate wealth to please the Americans and get the oil flowing, but at the same time, she's trying to keep at bay the hardliners that are just waiting for her one wrong move in order to pounce and undermine her government.

[Natalie Kitroeff]

Okay, so one broad condition for foreign investment for the oil companies to return to Venezuela is political stability, which does not seem like a guarantee at all at this point. What else?

[Anatoly Khmernaev]

Then come the legal guarantees. American oil companies have been burned here before. They have lost billions of dollars of investments, and they want to make sure that this will not happen again. And of course, for now, President Trump is completely focused on, on getting Venezuelan oil into the ground and into the United States. But his term is running out in three years, and we don't know who will succeed him and not do the oil companies. And this uncertainty and the scale of required investments is giving them a pause.

[Natalie Kitroeff]

Right. It's interesting, the point about Trump leaving office creating some uncertainty there, because essentially what you're saying is these companies, they operate on very long timelines, so not being able to forecast out 5, 10, 15 years in the future, that's a real liability.

[Anatoly Khmernaev]

It is. And of course, the world has gone through an electrical revolution where the structure of how we consume energy and the energy we need is changing dramatically. China is winning itself off the oil by moving towards electric cars and sustainable energy. And these companies, when they look at the billions of investments that have to be made, they're thinking, will this oil be needed in 10, 15 years time?

[Natalie Kitroeff]

Okay. Just to enumerate these conditions, because they are many and they feel really monumental. We're talking about some kind of understanding that there will be political stability inside Venezuela and a consistent desire and ability to collaborate with the United States, as well as a sense that the revolution in clean energy is not gonna just totally displace oil in the future. So for a moment, if we set aside whether all three or any of those conditions are actually anything that these companies can bet on, and just assume for a moment that things work out in their favor and that the investment flows in, play out that best case scenario for a minute, if Venezuela and these oil companies achieve that, what exactly would the US Gain?

[Anatoly Khmernaev]

The US Would gain a massive source of oil. And that means that global oil prices will fall, and that means that the gasoline prices will fall. The price that American people pay at the pump will fall. Remember that affordability is now the crucial tenet of American politics. This is a weight dragging down Republican Party in one election after another. And President Trump's biggest concern right now is bringing these prices down. And flooding the global oil market with Venezuelan crude is potentially one of the measures that could help them achieve that goal.

[Natalie Kitroeff]

And if we're just still living in this hypothetical best case, I have to also imagine that controlling what's assumed to be the world's largest oil reserves would give the US A lot of power geopolitically over our rivals. I mean, in that case, you really can turn a spigot on and off.

[Anatoly Khmernaev]

Absolutely. And this would have massive consequences. Take, for example, America's relations with Russia, another nuclear power with whom it's currently negotiating a broad deal focused on the war in Ukraine. Russia also derives most of its revenues from oil. And if Trump is able to set global oil prices by turning on and off the spigot of Venezuela's oil bounty, this is going to make it very difficult for Russia to achieve its goals without bowing to America's needs. China, as we said, is winning itself away from oil, but that process could take decades. And in the meantime, it is extremely reliant on imports from other countries. And if Trump can control the source of those impacts again, he can force Beijing to bow to his demands.

[Natalie Kitroeff]

I want to just push also on one of the premises of these conversations, which is that Trump and a future US Leader would actually be able to control Venezuela's oil. The US does not have, at this point, direct control over the Venezuelan government. And I assume, you know, down the line, future Venezuelan leaders may be reluctant, honestly, to be viewed as simply puppets of the US Government. And if the US Military is not, you know, training those weapons on Venezuela indefinitely, how long can that setup really last? Is the premise of control actually a fallacy?

[Anatoly Khmernaev]

For now, Natalie, things seem to be working out in Trump's favor. Venezuelan interim government has already announced that it's going to embark on a massive legal reform, potentially changing the oil laws to give foreign companies a greater say in how it's run. And remember that this government remains deeply dependent on the implicit threats of American force to keep its internal adversaries at bay, and appears to be more than willing to be doing Trump's bidding. But, Natalie, history shows that such ambitious, grandiose long term plans rarely turn out the way they've been envisioned. There's just so many different factors being thrown together out of this historical moment and the future of Venezuelan oil industry, and by extension the future Venezuelan people, may look very different from the way Washington sees it now.

[Natalie Kitroeff]

Well, Anatoly, thank you.

[Anatoly Khmernaev]

It's a pleasure to be here as always.

[Natalie Kitroeff]

We'll be right back. Here's what else you need to know today. On Monday, officials in Minnesota and Illinois sued the Trump administration over ICE enforcement in their states. They argued that the mass deployment of immigration agents violated the Constitution and infringed on state sovereignty. The suits come after a high profile profile ICE campaign in Chicago and in the middle of an ongoing and increasingly tense enforcement blitz in Minneapolis. Federal officials have defended their work in both states, saying it's been necessary given that local officials haven't cooperated with President Trump's immigration crackdown. And federal investigators examining the fatal shooting of Renee Goode are looking looking into her possible connections to activist groups that have been protesting ice, according to people familiar with the matter who spoke with the Times. They're also reviewing the actions of the federal agent who killed her. Today's episode was produced by Ricky Novetsky, Caitlin o', Keefe, Diana Wynne and Astha Chaturvedi. It was edited by Lisa Chow with help from MJ Davis. Lin Fact Checked by Susan Lee. Contains music by Dan Powell and Marion Lozano and was engineered by Alyssa Moxley. Special thanks to Carlos Prieto and Larissa Anderson. That's it for the Daily I'm Natalie Kitru. See you tomorrow.

[American Petroleum Institute Narrator]

This podcast is supported by the American Petroleum Institute. Energy is all around today. America's natural gas and oil keeps the country moving, growing and building and makes every day a little easier. But energy demand is growing and the infrastructure built today will help secure a more affordable, reliable future with enough energy to go around. When America builds, America wins.