2026 Oil Reform

Carlos Mendoza Potellá is an economist and university professor with vast experience and expertise regarding the Venezuelan oil industry. In this exclusive interview with Venezuelanalysis, Mendoza Potellá offers his analysis on the recent reform of the Hydrocarbon Law, the longstanding influence of Western conglomerates over Venezuela’s energy sector, and the struggle for sovereignty.

In late January, the Venezuelan National Assembly approved a reform of the Hydrocarbon Law. What are your views on the new law?

In broad terms, it is the relinquishing of our condition as a sovereign nation, plain and simple. We are not a nation anymore. We are a territory with some delegate administrators implementing decisions made abroad. Who decides? Emperor Trump, who has his proconsul Marco Rubio.

The approved law meets the maximum demands that the Venezuelan right and the oil conglomerates have been making for at least the last 25 years. The 2002 coup against Chávez was to impose something like this, the return to the old concession model. It is the fulfillment of all the dreams of the old “meritocratic” leadership of [state oil company PDVSA], the people who did everything to minimize the fiscal contributions to the country, whether that meant buying 37 refineries abroad or other disasters that wrecked the country.

The reform is a victory for international oil capital, alongside a discourse that hands over the destiny of the industry to major corporations and diminishes national participation as some unproductive “rentierism.”

The Venezuelan oil industry has gone through various stages, with varying degrees of influence from major transnational corporations, whether that is the period prior to the formal nationalization in 1976 or the Oil Liberalization (Apertura Petrolera) of the 1990s. How do we situate the new law within that context?

I believe this is a step backward beyond the apertura or the pre-nationalization period –perhaps it’s a return to 1832! In 1829, Simón Bolívar issued a decree transferring the Spanish crown’s mining rights to Gran Colombia. This, in turn, was based on old medieval law, essentially establishing that mines were the property of the sovereign, the king. In fact, that is where the term “royalty” comes from –as a tribute to the king. And in 1832, when Venezuela separated from Gran Colombia, that decree ratified the nation’s ownership of its mines. 

Obviously, oil didn’t emerge until 30 or 40 years later, but by 1866 concessions were already being granted. For a time, people spoke of “material that comes from the subsoil,” even though everyone already knew it was oil.

Our first boom was with asphalt. In 1883, Guzmán Blanco granted the Lago Guanoco concession to his buddy Horacio Hamilton, who later transferred it to the New York & Bermúdez Company, a subsidiary of the US firm General Asphalt. The asphalt boom lasted 50 years, and with it, streets and highways were built all over the United States.

But the example of New York & Bermúdez is significant because when Cipriano Castro came to power in 1899, he found out that the company had not paid taxes and attempted to collect them. What did the corporation do? It financed the so-called Revolución Libertadora led by Manuel Antonio Matos, a banker from La Victoria, which was ultimately defeated after two bloody battles. It was the first instance of foreign hydrocarbon interests seeking to control national politics. And it was always linked to the United States.

In the 1920s, then-dictator Juan Vicente Gómez tasked his minister, Gumersindo Torres, with drafting a hydrocarbons law, but the foreign companies did not like it. And Gómez told them, “Well, then, write the law yourselves!” Later, in 1936, the López Contreras administration drafted a very good law, but since it wasn’t retroactive, the companies did not mind because they already had their concessions granted.

When do we start seeing the first steps toward Venezuelan oil nationalism?

It was precisely in 1941 that Medina Angarita took office and commissioned a massive dossier on all the concessions in the country, informing the US government that Venezuela was aware of the importance of its oil. This was during World War II, and the oil companies were haunted by the specter of the 1938 Mexican nationalization under the government of Lázaro Cárdenas.

What was [Franklin D.] Roosevelt’s response? He sent a delegation from the State Department, not to intercede on behalf of the oil companies, but to convince them to accept Medina’s reform, because Venezuelan oil was vital to the war effort. The law passed in 1943 was quite progressive. Its first article stated that hydrocarbons are a matter of national public interest, and as such, concessions were granted for a maximum term of 40 years. Eighty percent of the concessions were granted at that time, to expire in 1983.

Venezuelan production grew through the 1970s, but as the end of the concessions approached, the transnational corporations began implementing policies to somewhat ease the hostility toward foreign investment.

Thus, a policy of “Venezuelanization” of the industry’s management was put into effect. That is why, when the so-called nationalization took place (1976), companies such as Shell and Creole, a subsidiary of Standard Oil-Exxon, had Venezuelans serving as president or vice president. These executives later assumed leadership of the newly created national companies. Their passports were Venezuelan, but their hearts belonged to foreign corporations!

Historically, how was the relationship between foreign corporations and Venezuelan authorities? And how did they respond to the 1976 nationalization?

The corporations grew accustomed to the idea of an industry tailored to their interests. I mentioned how they were the ones who drafted the first Hydrocarbons Law. Oversight bodies, such as the Technical Office of Hydrocarbons, were constantly undermined in their efforts to regulate oil activities. And so the companies could extract oil without paying royalties, violate technical standards for field exploitation, or export gasoline instead of fuel oil.

The 1970s were a turbulent time for the oil sector, marked by geopolitical tensions and the 1973 crisis in the Arab countries. In 1973, James Akins, the Nixon administration’s Director of Energy at the State Department, wrote an article in Foreign Affairs titled “The Oil Crisis; This Time the Wolf Is Here.” He argued that Venezuela could be key to reducing dependence on the Middle East, and that in the face of growing oil nationalism, it was necessary to cede some ground and consider other models of participation, while maintaining control over critical areas such as refining and commercialization.

Put differently, it was possible to offer some token concessions to the nationalist aspirations of oil-producing countries like Venezuela. And that rhetoric spread to the transnational corporations. The president of Shell said at the time, “Venezuela is going to have to take action regarding its oil industry,” while the head of Creole spoke of “the Venezuelans’ oil”!

There were growing signs of how the nationalization would take shape and how the transnationals were restructuring. A good example is the Venezuelan Petroleum Corporation (CVP), created in 1960. Juan Pablo Pérez Alfonzo, whom I consider a visionary and a deeply nationalist figure, had conceived it as a company that would develop until the time came for the state to take over production. But the governments did not let it grow; they did not assign concessions it was entitled to, and by the time of nationalization, the CVP was simply one more operator among 13 or 14. 

In contrast, [Petróleos de Venezuela, SA] PDVSA, created with the nationalization, did have a very clear vision from the start. I remember hearing senior PDVSA executives talking among themselves, discussing how one came from the “Exxon culture,” which was more vertical, and the other from the “Shell culture,” which was more horizontal. And these were the managers! They were the leaders of the Venezuelan oil industry, which had very little “Venezuelan” about it. What we are seeing now is the reconstitution of all these things.

Circling back to the current reform, we have seen that sovereignty is a central issue. How is it affected on different fronts?

For me, a fundamental issue is the return of concessions. Because that means going back decades, handing control back to transnational conglomerates. With taxes and royalties, the problem is not whether the rate is 30% or 15%; that flexibility existed in the past. But now it is the transnational corporations that tell the government what their operating costs are and how much goes to the Venezuelan state. There is no oversight body to verify this; instead, the company says, “I need you to lower royalties to this level” for the project to be profitable.

The return of international arbitration is also a brutal setback, because it means that disputes are not settled in Venezuelan courts, but in other bodies that have a history of defending corporate interests. There is no role left for the Public Solicitor’s Office (Procuradoría General), which is essentially the nation’s attorney. 

For months we were told we were ready to confront imperialism, but the truth is that everything is being imposed on us. Even the National Assembly is castrating itself. It has enacted a law stating that oil projects no longer require the parliament’s approval; they need only be notified. And on top of all that, there is also the constitutional issue. The reform conflicts with Articles 1, 12, 150, 151, and several others of the Constitution. But this is not merely a constitutional violation; it is a total surrender. A surrender of sovereignty that calls into question our status as a republic.

One of the issues under debate is the distinction between a country that owns oil and a country that produces oil. How should we understand the difference?

Of course, that’s fundamental. A country that owns oil simply collects royalties, and it does so according to its political capabilities. At the moment, Venezuela’s capabilities are limited, because the military cannot confront the enemy, and allies like Russia and China have not shown themselves willing to take any risks. So, there is little room to impose conditions on the US.

But this is a country that has grown used to the multinational corporations having free rein over its oil sector. Unfortunately, there are many people, within the industry itself, who believe that “the foreign conglomerates developed this and therefore have a right to these privileges.” Curiously, that is the same rhetoric Trump uses! 

This struggle for sovereignty is fundamental in oil-producing countries. We have seen this with the countries of the Middle East, which try to assert themselves but remain highly dependent on the United States. Obviously, they have the advantage of not being as close as we are. But in my opinion, historically we have lacked nationalism on this issue.

One of the arguments in favor of reforming the Hydrocarbon Law was the need to attract investment to so-called “green fields,” on the grounds that when the previous law was passed in 2001, there were many mature fields ready for development and this is no longer the case. However, major corporations have not shown much enthusiasm. What is your reading on this?

Those are fantasies about oilfields that have always been unviable; it is the obsession with the Orinoco Oil Belt. Humberto Calderón Berti, minister of mines in the 1980s and a major proponent of PDVSA’s internationalization, was already talking about green fields back then. By the way, Calderón Berti is now talking about the possibility of fracking in Lake Maracaibo, which would make the lake’s environmental disaster even worse.

The idea that an avalanche of investment is coming is an illusion, and the oil companies themselves know it. Trump talks about investments of $100 billion, but transnational corporations like ExxonMobil use the word “uninvestable.” With market volatility, no one is thinking about investing in oil with extremely high production costs. There is a study that concludes that increasing production to 2.6 million barrels per day based on the Orinoco Belt would require US $90 billion in investments and $122 billion in operating expenses over the next 10 years to drill 13,000 new wells! In other words, it is completely unfeasible.

On top of that, OPEC’s forecasts for oil demand over the coming decades aren’t particularly ambitious. (1)

So who stands to benefit from this new landscape? On the one hand, small “rogue” companies that can take on a well here and there. But above all, the conglomerates that are already here, like Chevron, which know the lay of the land and can expand their operations or make their current operations more profitable. The same goes for Eni and Repsol, which have some crown jewels, like the offshore Perla natural gas field. The corporations that come will be betting mostly on conventional fields, not the Orinoco Belt.

It is very commonplace to hear about US refineries in the Gulf of Mexico that are built to receive Venezuelan crude. That is true, but it is not oil from the Orinoco Belt! It is oil from the Oriente (East) and Occidente (West) oil-producing regions.

Let us stay for a moment on the Orinoco Oil Belt, since that is where the talk of the “largest oil reserves on the planet” centers, as well as the prospects for a massive increase in production. What are the myths and realities surrounding these deposits?

The Orinoco Belt is a geological miracle. Eighty million years ago, 10–15 percent of all life that existed on the planet was fossilized north of the Orinoco River. It is something to cry out to the heavens. But that is not exploitable oil. It is extra-heavy crude, a sticky mess that needs to be upgraded. First it must be converted into liquid petroleum so it can flow through pipelines, and then taken to be refined and turned into gasoline. 

In the 1970s, the United States saw the energy crisis coming and asked, “When conventional oil runs out, where can we find oil around the world?” In three places: the Soviet Union, Canada, and Venezuela. And where in Venezuela? In the Orinoco Oil Belt. Pérez Alfonzo spoke of the belt as “something for the future,” but the United States wanted to accelerate exploitation and sent a delegation in 1971 to convince President Rafael Caldera to begin the process. In fact, the name was changed from “Tar Belt” to “Oil Belt” to make it more attractive.

The US Geological Survey estimates that there are 513 billion barrels of “technically recoverable” oil. But that is absurd, because there is no capacity. What makes a reserve recoverable has to do with economic ability, the market, and the available technology. Nevertheless, the Orinoco Belt has been at the center of grandiose projections over the past few decades, alongside the highly lucrative business of certifying reserves.

The oil reform took place in a specific context, following years of economic sanctions that have left PDVSA in a very difficult situation. What would be an alternative path? How can the industry recover without surrendering sovereignty?

There are no magic solutions, obviously. We are facing imperialism in the Trump era; we see all its destructive potential. It is a phase where the US, paradoxically, recognizes its weakness and is entrenching itself in its “backyard.” But we must be aware that the industry’s current course is one of total capitulation.

Whether we can recover, whether it is possible or not, we must think about it rigorously, in a sovereign manner. And above all, we must have a serious plan; we cannot be dreaming of 5 or 6 million barrels a day.

There are 17,000 conventional oil wells, with the capacity to produce, abandoned around the country. Of the 35,000 wells in Venezuela, only half are currently producing. The others require investment, though not particularly large ones. And what kind of oil will these wells produce? Crude grades ranging from 20 to 30 degrees. But we need a plan, to examine wells one by one. These are wells that will produce 20, 50, or 100 barrels a day, but it is light and medium crude—the “classic” Venezuelan oil.

So, from a nationalist perspective, what does the future hold for Venezuela’s oil industry? 

The future is to build a post-oil Venezuela. This was already being discussed by theorists such as Francisco Mieres and Pérez Alfonzo in the 1970s. Then, in recent years, many began talking about a post-oil or post-rentier country, but mostly to cover up their incompetence and inability to maintain production levels.

There is no magic solution, and the oil industry will have to play an important role. But the current situation is dire. We are in a new phase of absolute political dependence. It’s not just about oil, or that the US controls revenues, imposes concessions, and so on. It is that the country has lost the ability to make its own decisions.

There are also expectations of the people, who to a large extent have become accustomed to the idea that their oil will last forever. That creates the illusion that things can improve very quickly. The path will be slow, but it has to start with regaining sovereignty.

Note

(1) The interview was conducted before the launch of the US-Israeli war against Iran.

Caracas, March 25, 2026 (venezuelanalysis.com) – Venezuelan Acting President Delcy Rodríguez has reiterated calls for foreign investment in the Caribbean nation.

Addressing the FII PRIORITY Miami Summit, Rodríguez showcased Venezuela’s economic growth and lauded the investment opportunities in the country’s vast oil, natural gas, gold, and other mineral resources. The Venezuelan leader highlighted the recent pro-business overhaul of the country’s Hydrocarbon Law and other upcoming reforms as key in generating “flexibility,” “guarantees,” and “security” for investors.

“The new Hydrocarbon Law creates important mechanisms for private sector control over production and commercialization,” Rodríguez said in her video message from Caracas. “It also creates flexible fiscal arrangements and establishes alternative conflict-resolution processes such as international arbitration.”

The acting president added that 64 percent of the price of a barrel is up for “negotiations with investors” in terms of reduced royalties and taxes, as well as dividends. 

Approved in late January by the Venezuelan National Assembly, the new Hydrocarbon Law allows the executive to reduce taxes and royalties at its discretion. The reform also grants expanded control to private corporations, curtailing the state’s sovereignty over the industry established under Hugo Chávez under the 2001 Hydrocarbon Law and subsequent reforms.

In her remarks, Rodríguez urged “de-ideologization,” vowing, “regardless of different [political] views, a favorable climate can be created so that investors have the mechanisms so that their investments foster returns.” She added that she has met with representatives from 120 multinational corporations since January. 

“Our reforms are a call for investors to participate,” Rodríguez stated. She went on to press for greater Latin American economic integration and for an end to unilateral sanctions against Venezuela, though she refrained from mentioning the US by name.

The Future Investment Initiative (FII) Institute is a non-profit run by Saudi Arabia’s Public Investment Fund and holds regular conferences bringing together business executives, analysts, and political leaders.

Rodríguez’s participation in the Saudi initiative came amid unprecedented energy market volatility as a result of the US and Israeli war against Iran. In spite of strong Venezuelan ties with Iran over the past 25 years, the Rodríguez administration has not taken a firm stance on the conflict, having published and later withdrawn a controversial statement. Caracas expressed solidarity with Qatar and the UAE after Iran retaliated against US military assets in the region.

The Venezuelan leader’s Wednesday message to investors in Miami followed a meeting with business executives at Miraflores Presidential Palace on Tuesday. The companies represented were not disclosed, though Houston-based oil giant Exxon Mobil has confirmed it has a team in Caracas “looking to assess the state of the resource that’s there.”

Rodríguez delivered a similar pitch hailing Venezuela’s natural resource potential and the prospects for foreign conglomerates opened by ongoing reforms. She appealed for the full lifting of sanctions, arguing that US Treasury licenses hurt investor confidence.

Since January, the Trump administration has issued a number of sanctions waivers allowing Western entities to engage with the Venezuelan energy and mining sectors. The licenses block transactions with companies from China, Cuba, Iran, North Korea, and Russia.

Additionally, the Treasury exemptions mandate that all royalty, tax, and dividend payments destined for Venezuelan state entities be deposited in US-run accounts. Washington currently controls Venezuelan oil proceeds, having returned a reported US $500 million, out of an initial $2 billion agreement, to Caracas.

On Tuesday, Rodríguez likewise announced the imminent departure of a Venezuelan diplomatic mission to Washington. Félix Plasencia, slated to become the country’s ambassador to the US, will lead the delegation.

“Our delegation will manage this new stage of diplomatic relations and dialogue between our two countries,” she affirmed.

Caracas and Washington fast-tracked a diplomatic rapprochement in the wake of the January 3 US attacks against Venezuela and kidnapping of President Nicolás Maduro and First Lady Cilia Flores. The two governments reestablished diplomatic relations in early March after a seven-year hiatus. The Trump administration went on to recognize Rodríguez as Venezuela’s “sole leader” days later.

Rodríguez, who had served as vice president since 2018, assumed the presidency in an acting capacity on January 5 with the endorsement of the Venezuelan National Assembly and Supreme Court, which declared Maduro’s absence as temporary.

Maduro and Flores pleaded not guilty to charges including drug trafficking conspiracy and will have a court hearing on Thursday. US officials have not presented evidence to sustain reiterated “narcoterrorism” accusations against Venezuelan leaders, while data from specialized agencies has found Venezuela to play a marginal role in global narcotics trafficking.

Edited by Lucas Koerner in Fusagasugá, Colombia.

The early morning of January 3, 2026, marked a turning point in Venezuela’s recent history. An operation carried out by US forces combined airstrikes on Caracas and strategic military areas with a ground incursion that culminated in the abduction of President Nicolás Maduro and his wife, Cilia Flores, and their subsequent rendition to New York. The operation left more than 90 dead, including 32 members of the Cuban special forces who fought to protect Maduro, inflicting some damage on the imperialist forces before being killed.

While it is certainly strange that the United States could carry out the operation to kidnap Maduro and his wife without encountering significant resistance—beyond that offered by the innermost security ring, most of whom were of Cuban origin, like the aforementioned 32 martyrs—perhaps even more surprising are the statements made by Defense Minister Vladimir Padrino López. Weeks after Maduro’s kidnapping, Padrino asserted that it was impossible to deploy fighter jets at the time of the attack given the United States’ air superiority, with 150 aircraft. He thus acknowledged that, with the exception of the president’s personal guard and a few soldiers stationed near the residence, the Venezuelan Armed Forces did not respond to the imperialist aggression. 

We cannot speculate on military matters, since we are not experts and do not have all the necessary information on the issue. That falls outside our purview. In any case, Padrino López’s own words and the events that unfolded during the attack indicate that, for some reason or another, the decision was made not to respond militarily to the Delta Force attack in the early hours of January 3 in Caracas. 

To the surprise of many, Maduro’s abduction did not lead to an immediate or complete institutional collapse. Vice President Delcy Rodríguez assumed the interim presidency, backed by the Supreme Court and the National Assembly, headed by Jorge Rodríguez. This “two-pronged approach” allowed for a certain degree of formal stability to be maintained while the administration of the country’s strategic resources was reorganized and the implementation of policies to adapt to the new context was accelerated.

Coordination with Washington was immediate. On January 15, CIA Director John Ratcliffe – who just days earlier had overseen the aggressive operation alongside Donald Trump in Florida – visited Caracas and met with Delcy Rodríguez. A few days later, the reform of the Organic Law on Hydrocarbons was presented and approved. This timeline reveals an almost symbiotic alignment between Venezuelan authorities and the US administration aimed at ensuring that oil wealth flows under the empire’s supervision, while simultaneously safeguarding the interests of large corporations and international creditors. Whether this link is the result of betrayal or capitulation is, for now, irrelevant. However, what is becoming clearer every day is that, if this were a tactical retreat, it seems unlikely that it could be corrected without strategic direction. And the latter appears to be beyond the reach of the country’s new authorities.

The liquidation of oil sovereignty: from Chávez to Delcy Rodríguez

The recent reform of the Organic Law on Hydrocarbons (LOH) is not a minor amendment to the previous law, but rather the culmination of a process of gradual neoliberal regression that finally took shape in the substantial repeal of the 2001 law – a cornerstone of the Chavista social project and a historic achievement in the assertion of Venezuelan sovereignty.

The original 2001 law, enacted by Hugo Chávez as an Enabling Law, alongside subsequent reforms in 2006 and 2007, marked the peak of Venezuela’s oil nationalization. It established exclusive state ownership of hydrocarbons in the subsoil, PDVSA’s monopoly on international marketing, majority state control in all joint ventures, state planning of investment, and the priority allocation of revenue to social development.

Throughout the various phases of Maduro’s administration, and in the face of the economic crisis caused by brutal US-led sanctions, revenue-seeking policies were implemented in an effort to secure liquidity and foreign currency, which gradually eroded the Chavista socioeconomic structure. This laid the groundwork for the gradual privatization of national resources, even though commercial control and ownership of the oil remained formally in the hands of the state.

Furthermore, during the 2019–2024 period, Maduro granted operating licenses to Chevron and other foreign corporations that allowed for direct exploitation and marketing in certain areas, setting precedents for private control over production. These agreements, presented as “temporary exceptions” to revive output and alleviate the social burden of sanctions, established the framework of dependency that the 2026 reform ultimately consolidated legally.

The January 2026 reform promoted by the Delcy Rodríguez administration, designed in accordance with the requirements of January 9 Trump administration Executive Order 14373, completes this process of erosion and represents a substantial rollback of the economic foundations of Chavista social transformation. Many of the changes introduced reflect mechanisms imposed under the Anti-Blockade Law (2020) and the Special Economic Zones Law (2022), which loosened restrictions on the private sector’s role, primarily through broad tax exemptions and trade incentives, while the 2026 LOH eliminates any remaining obstacles to private operational control of that sector. Or, in other words: what under Maduro were exceptions designed to circumvent sanctions – particularly pressing in the context of the pandemic and post-pandemic period – are formalized in Rodríguez’s reform to institute open subordination.

First, the exclusive state ownership of hydrocarbons in the subsoil – which the 1999 Constitution reaffirmed as an inalienable principle and which even Maduro formally upheld – has been rendered meaningless. While Article 5 of the 2001 law stated that “hydrocarbons in the subsoil are the property of the Republic,” the 2026 reform establishes that foreign private operators can acquire property rights over production from the moment of extraction, allowing them to market it directly without the state involvement that characterized the original Chavista model. The qualitative difference from the Maduro era is that this direct commercialization is now generalized across the entire sector, and the geographical and temporal restrictions that maintained a prospect of state control have been eliminated.

Second, the reform permanently eliminates the state monopoly on international commercialization. The 2001 law and subsequent reforms stipulated that PDVSA was the only entity authorized to export. The 2026 reform allows Western conglomerates such as Chevron, ExxonMobil, Shell, and Repsol to directly market all or portions of production, thereby undermining the state’s sovereign authority to decide to whom to sell, under what conditions, and at what price. Private companies now determine the destination of shipments, negotiating directly with refiners and distributors, while the Venezuelan state receives only royalties and dividends subject to external control mechanisms.

This commercial subordination is further reinforced by a restrictive framework imposed by Washington: General Licenses 46, 50A, and 52 issued by the US Office of Foreign Assets Control (OFAC) strictly prohibit Venezuelan crude oil from reaching entities based in Russia, China, Iran, North Korea, or Cuba, extending the ban to any company that maintains ties of ownership or control with individuals from those countries. Far from restoring commercial autonomy, the 2026 reform institutionalizes these barriers: while transnational corporations are given carte blanche to negotiate directly with Western refiners, all transactions with Chavismo’s historical partners remain prohibited. The Venezuelan state is reduced to collecting royalties under foreign supervision, with no capacity to direct oil flows toward those markets that for years guaranteed the sustainability of the Bolivarian project. This leads to a situation as deplorable as it is surreal, where the Zionist entity has been able to receive Venezuelan crude without hindrance, while Cuba is left helpless against Washington’s strangulation.

Third, the reform abolishes state control over investment and exploitation. The 2001 law reserved for the state the right to plan investment. The 2026 reform allows private operators to unilaterally determine investment levels, the technology to be used, and reserve policy, eliminating any need for approval from Venezuelan authorities beforehand. Foreign companies acquire the right to import equipment and personnel without restrictions, operating under a regime of fiscal and legal extraterritoriality.

Fourth, the reform dismantles the framework for protecting social investments. The 2001 law stipulated that oil revenues must be allocated primarily to economic and social development. The 2026 reform includes provisions allowing for international arbitration to resolve disputes, prioritizing the protection of private investments over any social claims. Funds derived from oil production are subject to foreign control mechanisms. 

Lastly, the aforementioned OFAC licenses effectively establish an architecture of fiscal subordination that privileges foreign interests, with Venezuelan oil proceeds deposited in US Treasury-run accounts. By accepting these licenses – and with the additional stipulations of the reform – the Delcy Rodríguez administration is effectively subject to mechanisms for external validation of its budgets.

Oil reform and foreign oversight are not isolated processes: they constitute a neocolonial arrangement disguised as economic normalization, which maintains formal sovereignty while relinquishing operational control. In strategic terms, Venezuela has gone from being an actor with a relative capacity to define its energy policy— despite sanctions and threats — to a subordinate whose critical decisions are dictated by the United States. 

Condemning Iran: geopolitical alignment as submission

Structural subordination is also evident in foreign policy. In the face of the recent imperialist aggression against Iran, launched jointly by the United States and the Zionist entity on February 28, 2026, which left more than 200 dead in the first few hours (including 148 girls killed in the bombing of an elementary school in Minab), the Delcy Rodríguez government rushed to abandon its traditional alliance with Tehran. 

In an initial statement, it took a stance condemning both the imperialist aggression and the response of the attacked country, falling into a shameful and ridiculous position of neutrality. This official statement, issued on February 28 stated that the Venezuelan government “condemns and deeply regrets that the military option was taken against Iran” and expressed dismay over the civilian casualties. However, the text then went on to refer to “Iran’s inappropriate and reprehensible military reprisals against targets in various countries in the region.” In doing so, the Delcy Rodríguez administration denied the bombed country the right to self-defense, placing the aggressor and the victim on the same level.

This statement, which Foreign Minister Yván Gil ended up deleting from his social media accounts hours later, marks a definitive break with the anti-imperialist stance that Venezuela had been building for two decades. The condemnation of the response by Tehran – a historic ally of Chavismo and high-level strategic partner since 2022 – shows that alignment with imperialism is now a fait accompli.

The Venezuelan communiqué cannot be understood without considering the context: the complete opening of the oil sector to foreign capital, the aforementioned reception in Caracas of the CIA director, and the subsequent arrival of US Chargé d’Affaires Laura Dogu as a diplomatic representative, along with visits by US Secretary of Energy Chris Wright, US Interior Secretary Doug Bergum, and the head of US Southern Command, General Francis Donovan; all within a few weeks, prior to Trump’s own recognition of Delcy Rodríguez as Venezuela’s president.

The Rodríguez administration not only hands over the oil and refuses to stand up to the empire, but also politically legitimizes US hegemony, breaking with the internationalist and popular legacy that Chavismo had always fostered, defended, and pushed forward. The condemnation of the Iranian resistance – which undoubtedly amounts to a condemnation of the entire anti-Zionist Axis of Resistance and all peoples oppressed by the colonial entity – is presented as “international responsibility” and a “commitment to peace.” The new Venezuelan administration thus disguises its surrender of diplomatic sovereignty and buries the solidarity-driven, internationalist Venezuela that Chavismo led, both during Chávez’s and Maduro’s tenures.

Cabral’s Dilemma: betrayal of the Chavista project or class suicide

To fully understand what has happened in Venezuela, it is quite helpful to examine it in light of the political theory of Amílcar Cabral, the independence leader of Guinea-Bissau and Cabo Verde and one of the most incisive thinkers of African and Third World liberation. Cabral first formulated the concept of “class suicide” in his 1964 message to Guinean militiamen, later developing it in numerous speeches throughout the 1960s and 1970s, particularly in his address, “The Weapon of Theory,” delivered at the First Tricontinental Conference of the Peoples of Asia, Africa, and Latin America, held in Havana in January 1966.

In the context of Guinea-Bissau’s liberation struggle, Cabral further developed this theory by applying it to that specific reality in his work Guinea-Bissau: An African Nation Forged in Struggle, posthumously published in 1974. The Guinean petty bourgeoisie, formed under the Portuguese colonial administration, had to choose between joining the African Party for the Independence of Guinea and Cabo Verde (PAIGC) and its peasant base, renouncing their privileges as colonial officials, or remaining on the sidelines and eventually collaborating with Portugal. Cabral had no illusions about the difficulties of this choice. The historical dilemma of this petty bourgeoisie, according to Cabral, is strictly binary: “either it betrays the Revolution or it commits suicide as a class.” There is no third way, no middle ground, and no possible compromise. Any attempt to maintain a neutral stance ends, sooner or later, in subordination to imperialism and the betrayal of national interests.

Class suicide did not mean the physical disappearance of individuals, but rather the destruction of their particular class status. It entailed a radical and conscious transformation. As Cabral explained, the petty bourgeoisie had to “renounce the class position it occupies in social life” and “integrate itself with the popular forces – that is, with the workers and the peasants.” In other words: voluntarily abandon their privileges as an intermediate class, cease to be a class separate and distinct from the people, and fully identify with the popular forces as part of a project of national and social liberation. 

The betrayal of the revolution – the other option in this dilemma – occurs when the bourgeoisie preserves its class existence and its intermediary privileges through subordination to imperialism. It does not renounce its position, does not identify with the people, and does not dismantle its networks of privilege. On the contrary, it negotiates its corporate survival with the enemy, becoming a comprador bourgeoisie. This betrayal is not always explicit or conscious. It often presents itself as “realism,” “pragmatism,” or “tacticism.” But its result is always the same: the consolidation of structural dependence and the blocking of any emancipatory project aimed at true sovereign independence, an indispensable requirement for delinking from the imperialist system.

The theory of class suicide has profound methodological implications for political analysis. First, it establishes that national liberation cannot be led by the national bourgeoisie or by the petty bourgeoisie unless they have committed class suicide. Second, it demonstrates that formal independence does not equate to real liberation if the political leadership retains its character as a subordinate intermediary class. Third, it points out that the class struggle continues during the revolutionary process and that the principal contradiction is not always between the people and external colonialism, but also between the people and their own leadership that resists class suicide.

What sets the Venezuelan case apart is that the petty bourgeoisie – whether treacherous or capitulationist – is not the traditional colonial class that Cabral analyzed, but rather a bureaucratic bourgeoisie forged in the very process of revolutionary change. Over two decades of Chavismo, this class has accumulated experience in state administration, built autonomous power networks, developed a distinct corporate identity, and created a social base of support. Class suicide would mean renouncing all this historical accumulation, dissolving into the popular masses, and reconfiguring the project from the ground up by aligning with the proletariat and the communal project. Betrayal, on the other hand, allows for the preservation of bureaucratic and clientelist power structures by adapting them to the new framework of subordination. A bureaucratic bourgeoisie that controls the state and oil revenues has its own material interests that may conflict with a direct confrontation against imperialism.

In the wake of the rapid and radical changes implemented by the Delcy Rodríguez administration that we have described, we can observe with bitterness how the national bourgeoisie has ceased to administer independence – the original purpose of the Chavista project – and has instead come to manage dependence.

All of this is being presented, as one would expect, under the guise of Bolivarian continuity, the preservation of symbols, and rhetoric about historical responsibility, all of which serve to obscure the surrender of oil revenues to imperialist control, demolishing what was once the cornerstone of the Chavista social project. This is accompanied by a rupture or abandonment of historic alliances such as with Iran and Cuba, with national resources destined for the Zionist entity without question, in a shameful capitulation to US interests.

The 2026 oil reform is the key element of this submission: state ownership of oil – a pillar of the sovereign development project – is being dismantled in favor of corporate control and placed at the mercy of the US Treasury. This constitutes a sophisticated form of neocolonial domination because it hinders resistance to the brutal imperial agenda. Indeed, the masses are not facing an enemy in the form of a foreign occupation, but rather an elite that speaks their language, appropriates their symbols and folklore, and maintains a patriotic rhetoric, all while systematically dismantling the core foundations that Chavismo built over decades in its quest for a historic break with dependency.

Conclusion

The history of liberation struggles teaches us that if the revolutionary project is the lighthouse, the revolutionary class must be its operator. As such, its cause must be anchored in a historical strategy capable of guiding even the most difficult tactical retreats. But there can be no tactical retreat without strategy, nor strategy without the material foundations on which to sustain it. Economic independence is not a mere ideological ornament of the revolutionary process: it is its condition of possibility. When a nation’s sources of wealth are handed over to the empire’s management, when the revenue that fueled the social project is subjected to external control, and when the state voluntarily relinquishes the instruments that allowed it to decide on its own development, there is no room left for future strategic maneuvering. What is presented as prudence or realism is nothing more than, at best, the institutionalization of capitulation; at worst, of betrayal. 

Those same processes of national liberation have also shown that no revolution has survived without cadres willing to take on the risks demanded by the confrontation with imperial power. Revolutionary leaders are not called upon merely to manage structures, but to embody a historic will capable of sustaining the conflict to its final consequences. In the early hours of January 3, as the Venezuelan state apparatus sealed its commitment to servile negotiation, those willing to give their lives for that cause were the Venezuelan soldiers and 32 Cuban internationalists who fell defending the presidential residence. And in that event, both brutal and symbolic, lies the essence of the dilemma Cabral articulated decades ago: in the face of imperialism, there is no lasting middle ground between class suicide and betrayal. Everything else – the rhetoric, the symbols, the appeals to tactics – are merely transient ways of naming a decision that, sooner or later, history ultimately reveals.

Joan López and Alejandro Pedregal are members of the Anti-Imperialist Network (AIN), anti-imperialist.net.

The views expressed in this article are the authors’ own and do not necessarily reflect those of the Venezuelanalysis editorial staff.

Source: El Salto Diario

Note: there have been minor edits to the original version to clarify certain aspects of the oil reform.