Podcast Summary: “Venezuela didn't steal U.S. oil. Here's what happened”

The Indicator from Planet Money — January 8, 2026
Hosts: Darian Woods, Waylon Wong
Guest: Francisco Manaldi, Director of the Latin America Energy Program at Rice University

Main Theme

This episode digs into the complex history of Venezuela’s oil industry, debunking recent claims that Venezuela “stole” American oil. The hosts explain how Venezuela’s massive oil reserves became entangled with foreign interests, nationalization, and US sanctions, and why — despite its oil wealth — its industry remains in crisis.

Key Discussion Points & Insights

1. Presidential Rhetoric and Media Frenzy

• (00:01-00:49) The episode opens with reflections on President Trump’s claims that Venezuela stole “our oil,” referencing Trump’s remarks at a recent press conference and on Truth Social about Venezuelan oil “turning over” to the US.
• Hosts highlight the measured reactions from actual oil companies, with one Texas Energy Co. spokesperson stating, “it would be premature to speculate on any future business activities or investments.”

2. How the Venezuelan Oil Industry Developed

• (02:17-03:25)
  • Francisco Manaldi breaks down the history: The oil industry in Venezuela arose in the 1920s, largely led by ExxonMobil (US) and Shell (British-Dutch).
  • The contracts with these firms, set to expire in 1983, gave Venezuela royalties and taxes for oil production.
  • In the 1970s, Venezuela took control of its oil fields, ending contracts early but compensating oil companies.
  • “They were well compensated. In fact, it was not controversial at all with the oil companies.” (Francisco Manaldi, 03:19)

3. Opening Up — and Cracking Down — in the 1990s and 2000s

• (03:25-05:22)
  • 1990s: Venezuela re-opens to foreign investment, forming new partnerships in the oil-rich Orinoco Belt (Chevron, ExxonMobil, ConocoPhillips).
  • Hugo Chavez Era:
    • Chavez seizes power in 1999, initially leaving contracts intact.
    • Later, “I’m going to change the contracts, I’m going to dramatically increase the government take and I will become a majority shareholder, the Venezuelan national oil company of those projects.” (Francisco Manaldi, 04:05)
  • Chevron accepts; ExxonMobil and ConocoPhillips refuse and are expropriated with paltry compensation.
    • “Venezuela then basically expropriated them. And they offer a very low compensation compared to what was sort of the actual market values.” (Francisco Manaldi, 04:56)
  • Both firms take Venezuela to international arbitration; damages are awarded, but little is paid.

4. Who Actually Owned the Oil?

• (05:33-05:51)
  • Francisco underscores: “The oil in the ground owned by the companies, Venezuela always owned it.”
  • The issue was compensation for investments, not ownership — contradicting the rhetoric of “oil theft.”

5. Venezuela’s Oil Potential vs. Reality

• (05:51-07:24)
  • Today, Venezuela produces about 1 million barrels per day, less than Algeria and a fraction of its peak (3.5m bpd).
  • Potential capacity: As much as 4-5m bpd, rivaling major producers.
  • Quality challenge: Venezuela’s oil is “thick and sulfurous, what’s called heavy sour crude.” (Cooper Katz McKim, 06:49)
    • “That sounds like reviews of my stand up comedy set.” (Darian Woods, 06:58)

6. Why Has Production Collapsed?

• (07:28-08:24)
  • Big factor: In 2002, after a national strike, Chavez fired half of the national oil company workforce — especially top technical experts.
  • “He fired 20,000 of the 40,000 employees. Among them, almost all the top executives and… 95% of the PhDs… And so that made the national company in Venezuela really decay and basically it got destroyed.” (Francisco Manaldi, 07:49)
  • US imposed broader sanctions later, but the production collapse began before the toughest sanctions hit.

7. Impact of Sanctions

• (08:24-08:57)
  • Sanctions “impeded a potential recovery.”
    • “For the most part, the collapse of the Venezuelan oil industry is a self inflicted wound. But in the last few years there is a component of US sanctions.” (Francisco Manaldi, 08:40)
  • Sanctions discourage investment, expertise, and any return of foreign companies.

8. Looking Forward: Can the Oil Industry Rebound?

• (09:03-09:45)
  • Despite Venezuela’s oil reserves, “foreign oil companies worry about getting shaken down by the government in the future.”
  • “Unfortunately, I’m not optimistic because of history and because if there is no smooth sort of transition in Venezuela to democratic government and political stability — all big ifs — you will not see the kinds of investments that will be needed…” (Francisco Manaldi, 09:21)

9. Venezuela's Past and Present

• (09:45-10:06)
  • Francisco shares that he left Venezuela in 2012, once a relatively prosperous democracy. Its current turmoil is “hand in hand” economic and political.

Notable Quotes & Moments

• Francisco Manaldi, on compensation after 1970s nationalization:
  “They were well compensated. In fact, it was not controversial at all with the oil companies.” (03:19)
• On Chavez expropriation:
  “I’m going to change the contracts, I’m going to dramatically increase the government take and I will become a majority shareholder... of those projects.” (04:05)
• On collapse of technical expertise:
  “He fired 20,000... among them almost all the top executives... 95% of the PhDs...” (07:49)
• On Venezuela’s oil industry collapse:
  “For the most part, the collapse... is a self inflicted wound. But in the last few years there is a component of US sanctions.” (08:40)
• On future prospects:
  “You will not see the kinds of investments that will be needed to develop the oil sector and you will continue to see Venezuelans leaving the country.” (09:21)
• Comic relief:
  “That sounds like reviews of my stand up comedy set.” (Darian Woods, 06:58)

Timestamps for Important Segments

• 00:01-00:49: Trump’s oil rhetoric and US oil company reactions
• 02:17-03:25: Origins of Venezuela’s oil industry and first nationalization
• 03:25-05:22: 1990s-2000s contracts, Chavez’s nationalization, compensation disputes
• 05:51-06:43: Venezuela’s oil output history and potential
• 07:28-08:24: The 2002 mass firing and collapse of expertise
• 08:24-08:57: US sanctions: timing and impact
• 09:03-09:45: Ongoing risks and future outlook

Conclusion

The episode delivers a compact, deeply sourced history lesson on why Venezuela’s vast oil riches have remained untapped and how public perception — fueled by political rhetoric — misrepresents the facts. The real issues are less about “stolen oil” and more about political instability, brain drain, expropriation, and sanctions, making any oil renaissance unlikely without dramatic change.