Venezuelas

Britain’s energy giants stand to make huge profits in Venezuela amid a major diplomatic rapprochement between London and Caracas, it can be revealed.

It comes in the wake of the kidnapping of Nicolás Maduro earlier this year in a move described by UN experts as a “deliberate violation of the most fundamental principles of international law”.

Donald Trump has repeatedly emphasised how the US intervention was motivated by oil interests, even telling the UN General Assembly last week: “To the victor belong the spoils”.

Hours after Maduro’s seizure, Keir Starmer said Britain was “not involved”, but refused to be drawn on whether it was unlawful. “We shed no tears about the end of the regime,” he declared.

The kidnapping is already resulting in a boon for Britain’s energy giants, with interim president Delcy Rodríguez welcoming foreign companies back to Venezuela and softening the country’s hydrocarbon legislation.

Since January 2026, BP and Shell have signed major agreements with the Venezuelan government as it appears to be operating under duress from the Trump administration.

Documents obtained by Declassified indicate how Britain’s Foreign Office has helped facilitate their return, with an influx of high-level meetings between executives and officials taking place in the weeks and months after Maduro’s removal.

The opening of Venezuela’s economy has also paved the way for the normalisation of relations between London and Caracas. Plans were made earlier this month to upgrade diplomatic representation to ambassadorial level.

But serious questions surround benefitting from the kidnapping of a head of state amid a broader assault on Venezuela’s sovereignty.

“US coercive control over Venezuela’s oil revenues may have involved violations of Venezuela’s sovereignty”, said UN special rapporteur Ben Saul.

That includes breaches of “the duty of non-intervention, the right of economic self-determination, and the principle of permanent sovereignty over natural resources”.

Professor Francisco Rodríguez, a leading Venezuelan economist who has advised its national assembly, told Declassified that “deals of this type are much more likely to survive when there is a broad consensus not only on their legal validity but on their desirability for the nation.

“At present, I see many more sectors of Venezuelan society that do not consider these agreements either legal or convenient for the nation, and some of them see them as outright exploitative”.

Rodríguez added: “It is hard to see any truly autonomous Venezuelan leaders signing these deals were a gun not pointed at their head”.

Firesale

Venezuela’s economy has been restructured under Delcy Rodríguez, who assumed power in January and was pictured with Trump earlier this month in New York, just miles from Maduro’s prison cell.

The country’s hydrocarbon legislation has been modified to make the terms more favourable for foreign firms, and its energy revenues are now being diverted through the US Treasury, with Washington taking a major cut.

By July, the US government had collected more than $13 billion in revenues from Venezuelan oil sales, according to the Financial Times.

In August, Trump also announced a “historic oil agreement” with Venezuela which would give the US control of more than 65 billion barrels of oil reserves for 100 years.

The deal would secure “our energy dominance for the next century”, Trump declared, “all at zero cost to the United States”. 

Remarkably, the company at the forefront of that agreement, North American Blue Energy Partners (NABEP), hired three lawyers who had previously worked for the UK’s Serious Fraud Office.

It is within this context that Shell and BP have returned to Venezuela.

Shell has been granted concessions to develop and operate two offshore gas fields, named Loran and Dragon, which are projected to contain vast amounts of recoverable gas.

The company also signed a preliminary deal to develop two onshore oil fields known as Carito and Pirital in Monagas State, one of the country’s most oil-rich regions. 

After signing a memorandum of understanding (MoU) in Caracas in March, Shell’s regional manager Adam Lowmass recalled the company’s “long history in Venezuela, dating from 1912”. He declared: “I could not be prouder of our team”.

BP signed its own MoU with the Venezuelan government in April to develop the Cocuina-Manakin gas field which sits on the maritime border with Trinidad and Tobago.

The company was also granted a licence for the second phase of operations on the Loran field in partnership with Emirati XRG and Qatari UCC Oil and Gas, and has started trading oil in the US.

Shell and BP plan to process Venezuela’s natural gas using the Atlantic LNG plant and export terminal in Trinidad and Tobago, in which they are both major shareholders.

This cross-border presence will give the firms significant control over the supply chain of natural gas in the Caribbean, a large portion of which will be destined for Europe.

Meetings and lobbying

Data obtained by Declassified through the Freedom of Information Act indicates how the Foreign Office has facilitated Shell and BP’s return to Venezuela.

Executives from the companies met with Colin Dick, Britain’s chargé d’affaires in Caracas, eight times in the two months following Maduro’s kidnapping, compared with eight meetings for all of 2025.

While the Foreign Office has refused to disclose what was discussed beyond a few heavily redacted emails, the frequency of the meetings might be seen as implicit endorsement for the energy giants’ new ventures in Venezuela.

Oil has been guiding British foreign policy in Venezuela for over a century. Former foreign minister for the Americas Alan Duncan declared in 2018: “The revival of the oil industry will be an essential element in any recovery, and I can imagine that British companies like Shell and BP will want to be part of it”.

Britain’s current director for the Americas Harriet Thompson was in Caracas in early March 2026 as Shell was gearing up to sign major new energy deals.

Thompson “conducted a productive visit that included meetings at the Venezuelan Foreign Ministry and engagements with representatives of British companies to explore growth opportunities for both countries”, the embassy said.

When asked in parliament whether those talks involved British natural resource companies, the Foreign Office said the question had already been answered in January – two months before the meetings had even taken place.

In its own write-up, the Venezuelan government said the delegation was the first of its kind for years, and opened new routes for “trade exchange” within a broader goal of “strengthening cooperation in strategic sectors”.

Earlier this month, Venezuela’s foreign minister and former ambassador to the UK Félix Plasencia and National Assembly president Jorge Rodríguez, Delcy’s brother, were in London for another high-level diplomatic exchange.

Standing outside the Foreign Office, Rodríguez noted how the meetings with British diplomats had covered “oil and gas investments” and the “rapid economic growth of Venezuela”. 

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

Source: Declassified UK

Photo: Acting President Ramón J. Velásquez (1993–1994) and his cabinet on the last day of his term. Dr. Velásquez, both during his brief tenure and previously at the helm of a special commission, was a leading proponent of decentralization in the late 20th-century. | Source: Archivo Fotografía Urbana.

The next democratically elected president of Venezuela will inherit an office that is simultaneously too powerful and not powerful enough.

Too powerful because decades of centralization have placed extraordinary political, fiscal and administrative authority in Miraflores. Not powerful enough because whoever inherits it will also confront a damaged bureaucracy, weak public services, deteriorated infrastructure and institutions that may still be controlled by political adversaries.

That combination will make concentration tempting.

A new government will have an enormous reconstruction mandate and voters impatient for results. Every institutional restraint will risk looking like another obstacle left behind by chavismo. Decentralization can wait until the State is stabilized. Congressional procedures can wait because the crisis is urgent. Extraordinary executive authorities can be justified because ordinary government is too slow.

Many of those arguments will contain some truth.

That is what makes them dangerous.

Chávez inherited Venezuela’s presidentialist political culture and radicalized it.

If Venezuela wants this transition to be the last one it needs, the country cannot simply transfer the powers accumulated in the presidency to someone more democratic. But neither can it respond to authoritarianism by constructing an executive incapable of governing.

The question is not whether Venezuela needs a strong president or a weak one. It needs to decide what the president should actually be strong enough to do.

Miraflores was powerful before Chávez

Chavismo radically expanded executive power, but it did not invent Venezuelan presidentialism.

Long before Hugo Chávez, the presidency occupied an unusually commanding position over the political system. Oil reinforced that arrangement. Whoever controlled the national government controlled the principal source of public revenue, and the ability to distribute that revenue made Caracas not merely the political center of Venezuela but the financial center on which much of the rest of the government depended.

The result was a particular understanding of political effectiveness. Presidents were expected to not merely administer the executive branch but to solve national problems, distribute resources, arbitrate conflicts and impose direction on the State.

Chávez inherited that culture and radicalized it.

Carlos Rangel would have recognized something familiar in the phenomenon. His critique of Latin American political culture repeatedly returned to the attraction of the providential leader: the politician whose extraordinary personal mandate supposedly allows him to rise above institutions that appear slow, compromised or incapable of producing the transformation the country requires.

A new democracy has to be built for the political society Venezuela actually has.

Chavismo gave that tradition a twenty-first-century vocabulary. The leader possessed a direct relationship with the people. Institutions that resisted him therefore did not represent legitimate constraints on democratic power; they interfered with the popular mandate.

That logic did not begin with Chávez, and removing chavismo will not automatically remove it.

This is one reason institutional design matters more than hoping Venezuela will simply develop a different political culture. A new democracy has to be built for the political society Venezuela actually has, including its recurring attraction to presidents who promise to cut through institutions rather than patiently govern through them.

Decentralization was one answer

Venezuela has attempted to solve part of this problem before.

The decentralization reforms beginning in 1989 transformed Venezuelan politics by allowing voters to directly elect governors and mayors. They created alternative centers of democratic legitimacy, allowed regional leaders to build careers outside national party hierarchies and weakened the assumption that every important political decision had to originate in Caracas.

Those reforms were real democratic progress.

They also occurred during the accelerating crisis of the political system that had governed Venezuela since 1958. Carlos Andrés Pérez was attempting a profound economic transformation while confronting social unrest, two coup attempts, resistance within his own party and an increasingly fragmented political environment.

Enough independently powerful actors with absolute vetoes can also make coherent government extraordinarily difficult.

It would be wrong to claim that decentralization caused Pérez’s downfall. The crisis of his second government had far deeper causes. But the period should caution against the assumption that dispersing power automatically produces better government. A political system needs restraints. It also needs the capacity to reach decisions.

Juan Linz famously warned that presidential systems contain an inherent problem of competing legitimacy: both the president and the legislature can claim a direct mandate from voters. Venezuela could face that problem almost immediately in a transition. A newly elected president may claim a national mandate for reconstruction while legislators, governors, courts and other institutions exercise equally legitimate powers to resist particular policies.

Those conflicts are not defects but rather an essential part of democracy.

But enough independently powerful actors with absolute vetoes can also make coherent government extraordinarily difficult. The goal cannot therefore be to create as many obstacles to presidential action as possible.

Decentralization has to mean power, not administration

Chavismo subsequently demonstrated another weakness in Venezuela’s earlier decentralization: elected local government does not necessarily amount to decentralized power.

A governor who depends overwhelmingly on transfers determined in Caracas may be politically elected but remains fiscally vulnerable to the center. A municipality with responsibilities but inadequate revenue possesses decentralization on paper. A regional government whose police, infrastructure projects or public services can be bypassed by parallel national authorities is autonomous only until Miraflores decides otherwise.

Chávez and his successors became adept at exploiting these weaknesses. Political authority could be recentralized, resources redirected, parallel institutions created and opposition-controlled governments bypassed without formally abolishing governors or mayors.

A president who negotiates every administrative action with multiple institutions would not protect democracy for very long. It could instead discredit it.

A serious decentralization therefore has to involve more than another constitutional declaration that Venezuela is a federal State.

It must ask where revenue is collected, who controls it, which responsibilities genuinely belong to states and municipalities and which functions require national coordination. Regional governments need enough authority and predictable resources to govern without requesting political permission from the president. But the national government must retain enough capacity to maintain common standards, respond to national emergencies, redistribute among regions and preserve the Venezuelan State as a functioning whole.

That balance is much harder than simply transferring competencies from one level of government to another.

The State must still be able to act

An executive constrained by law is not the same thing as an impotent executive. The Venezuelan president should be capable of executing a legally approved budget, directing the national administration, coordinating responses to disasters, conducting foreign policy and implementing the program on which voters elected the government. Rebuilding infrastructure, stabilizing public finances and restoring basic services will require a national government capable of making decisions and making those decisions stick.

A presidency that must negotiate every administrative action with multiple institutions would not protect democracy for very long. It could instead discredit it. Citizens judge democratic government partly by whether it governs. If elections repeatedly produce leaders incapable of responding to crime, blackouts, inflation or deteriorating public services because every decision disappears into institutional paralysis, frustration with democratic restraint will eventually become politically valuable. The politician promising to eliminate the obstacles will always be waiting.

Institutional design has to emerge from Venezuela’s own history and needs.

Machiavelli understood the underlying problem centuries before modern constitutionalism gave it different terminology: a political order that cannot preserve itself will not remain a political order for long. Democracies require enough power to respond to genuine threats.

The danger lies in what happens next.

Emergency authorities created to save the State can outlive the emergency. Executive discretion justified by reconstruction can become normal government. A president given extraordinary authority because democratic institutions are initially weak acquires the ability to ensure that those institutions remain weak.

Venezuela has already lived that cycle.

Miraflores should matter less

The difficult conclusion is that democratic reconstruction will require whoever next controls the presidency to surrender powers at precisely the moment when there will be compelling reasons to retain them. That is a much harder political proposition than replacing chavista officials.

Someone who has spent years fighting to reach Miraflores may arrive there facing a devastated country and discover an arsenal of executive authority that could make reconstruction easier. It will be extraordinarily tempting to argue that institutional reform should come later, after the emergency has passed and the country has stabilized.

But democratic restraints are easiest to support when they constrain somebody else. Their real test comes when they constrain us.

The president should not determine whether an opposition governor receives the resources necessary to govern. The executive should not be able to transform regulatory authority into political discipline. Emergency powers should expire without depending on presidential generosity. Institutions capable of investigating the government should not owe their survival to that government’s continued support.

None of this necessarily requires turning Venezuela into a parliamentary republic, copying the United States or mechanically importing someone else’s federal model. Institutional design has to emerge from Venezuela’s own history and needs.

But one principle should survive whatever arrangement eventually emerges: winning the presidency should not mean winning the State. That principle protects more than the opposition, it also protects the president.

Winning should give politicians the authority to govern without giving them the tools to decide whether anybody else will ever govern again.

A system in which the loss of Miraflores does not mean losing access to every meaningful source of political authority makes electoral defeat less existential. Governors can govern. Legislators retain influence. Parties can preserve territorial organizations. Former incumbents can imagine returning through elections rather than manipulating the State to avoid leaving. Distributing power can therefore make alternation easier to accept.

The point is not to make political victory meaningless. Elections must have consequences. Governments need enough authority to implement different programs or democracy becomes little more than a ritual for changing administrators.

The objective is narrower: winning should give politicians the authority to govern without giving them the tools to decide whether anybody else will ever govern again.

That is the distinction Venezuela failed to maintain.

And it brings three problems of institutional reconstruction together. Venezuela needs institutions that remain democratic regardless of who occupies them. It needs a State capable of implementing rules while remaining bound by them. And it needs political power distributed widely enough that no single electoral victory becomes an ownership of the Republic.

For 25 years, Venezuela’s political system increasingly revolved around a simple question: who controls Miraflores?

A durable democracy will require making the answer matter considerably less. The next president of Venezuela should inherit enough power to govern the country, but considerably less power to define it.

Venezuela’s interim President Delcy Rodriguez took to the stage yesterday at the United Nations General Assembly meeting in New York City to deliver a rather bland speech, in which she thanked United States President Donald Trump for resuming “diplomatic relations and cooperation” with Venezuela.

This was a different vibe, to be sure, than the one she opted for at the same venue in September 2019, when, as vice president under Nicolas Maduro, she accused the US of perpetrating “economic terrorism” that did not require the use of bombs “but rather through banks and insurance companies”.

Denouncing the global superpower’s militarisation of international relations and punishment of millions of innocent people “in order to apply regime change doctrines and steal other nations’ resources”, the Rodriguez of 2019 went on to cite Venezuelan economic losses to the tune of $130bn between 2015 and 2018 alone on account of US sanctions.

She additionally offered her opinion that the domination of the US political system by “plutocratic minorities” made the country unqualified to impose its model on other countries.

Seven years later, US plutocracy is going strong with Trump at the helm – the same Trump alongside whom a grinning Rodriguez appeared in a photograph taken in New York on Tuesday, less than nine months after he oversaw regime change in Venezuela by kidnapping Maduro.

The kidnapped president is now also in New York, albeit in jail, and is scheduled to stand trial in June 2027. This despite his attempts to remind everyone that, as a sitting head of state, his prosecution in a foreign court contravenes international law.

Then again, abducting other countries’ presidents is also pretty glaringly illegal. But Trump has made it clear that he alone is in charge of deciding what is and is not permissible on any given day.

The abduction took place on January 3, when the US military launched air attacks on Venezuela, killing some 100 people and whisking Maduro and his wife away.

He is accused of an array of misdeeds, including being the leader of the “Cartel of the Suns” – which, mind you, does not actually exist – and engaging in “conspiracy to possess machineguns and destructive devices”.

This is quite the accusation coming from the country that just used all manner of destructive devices to bomb Venezuela and kill a bunch of people.

Anyway, bald-faced hypocrisy is nothing new in the land of the “plutocratic minorities”.

Now, the waning corporate media interest in Maduro’s fate amounts to another coup for US impunity, as folks go about more or less forgetting that there is a foreign head of state sitting in a Brooklyn prison.

But Maduro’s disappearance works out well for Rodriguez, as she goes about enabling the very theft of resources she once decried.

Rodriguez took the stage at the UN the day after Trump, who used the platform to pat himself on the back for the trampling of Venezuelan sovereignty that conveniently culminated in last month’s announcement from the White House of the “biggest oil deal in world history”, securing US majority control of more than 65 billion barrels of Venezuela’s proven oil reserves.

Speaking to his international audience, Trump boasted: “To the victor belong the spoils. You’ve all heard that.”

Never mind that you’re not technically supposed to admit that you attacked a country just to get its oil. (You’re also not, in polite company, supposed to threaten to annihilate Iran – another of Trump’s UN talking points.)

Since January, the US has lifted many coercive economic measures against Venezuela (including against Rodriguez herself), easing the brutal sanctions regime that as of 2020 was estimated to have already killed 100,000 Venezuelans, according to former UN independent expert Alfred-Maurice de Zayas.

But trading sanctions for de facto colonialism isn’t a great deal, either.

Meanwhile, Trump’s continued manic bombing of vessels in the Caribbean and Pacific, which a recent UN report warned may constitute crimes against humanity, suggests the US is nowhere near to kicking its old habit of terrorism – and is all the more reason that Rodriguez might have refrained from thanking the US leader for his “cooperation”.

As Gregory Wilpert, founder of the Venezuelanalysis website and author of Changing Venezuela by Taking Power, diplomatically put it to me: “One cannot help but wonder whether Delcy Rodriguez is over-complying with Trump in some aspects of her negotiations with him.”

Noting that Rodriguez is “in a highly vulnerable position”, Wilpert ran through a few of the options she faces, such as “the possibility that the Trump administration could treat her as it treated Maduro – by attempting to kidnap her – or as it treated Iran, by targeting the country’s highest levels of government”.

Or, Wilpert said, there is always the Cuba approach, which would entail “the kind of economic siege” that is undertaken “with the aim of starving an entire country”.

In her UN address, Rodriguez promised that Venezuela would hold elections at some unspecified point in time – not that the US, for its part, really cares about democracy as long as the right people are in power.

And although it’s still too early to tell, Rodriguez might just be one of those people.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.

On the same day Delcy Rodríguez was in New York meeting Donald Trump and representing Venezuela at the United Nations, María Corina Machado was trying, unsuccessfully, to get closer to her own country.

It was her third attempt in barely 24 hours. First came a planned maritime departure from Panama, which was canceled after the company operating the vessel reported mechanical problems. Then came an attempted flight to Aruba, from where Machado intended to continue by sea. Finally, there was another flight plan, this time for Curaçao. That trip did not happen either. Her team now says she has attempted to return to Venezuela seven times since she left in December 2025 to get her Nobel Prize in Oslo.

The exact responsibility for the latest failures remains unclear. But what happened during previous attempts is better documented. Axios reported in July that the Trump administration’s position was that third countries should not help Machado enter Venezuela. When Deputy Secretary of State Chris Landau appeared to tell the Dutch government otherwise, officials in Washington corrected the message. Curaçao withdrew permission for Machado’s plane to land while she was already in the air. According to the same account, Secretary of State Marco Rubio subsequently reiterated the policy to Machado personally.

This sits awkwardly beside Washington’s public position. Rubio said this month that Machado, as a Venezuelan citizen, has every right to return “whenever she wants.” A State Department official told Congress in July that the US would not obstruct her return. Trump himself has denied telling her to stay away.

After World War II, keeping Emperor Hirohito in power did not mean preserving his capacity to decide who could participate in Japanese politics.

All of those statements may be technically true. The US does not issue Venezuelan visas and cannot legally forbid a Venezuelan citizen from entering Venezuela. But Machado cannot teleport into Caracas. Getting home requires aircraft, airports, territorial waters, neighboring governments and, increasingly, governments that want to know Washington’s position before helping her. There is a meaningful difference between saying that the US will not prohibit her return and telling American partners that facilitating it is not US policy.

This would already be an odd arrangement for any opposition leader. It is stranger still in Machado’s case. She is hardly a geopolitical threat to Washington. She has gone out of her way to present a democratic Venezuela as a close strategic partner of the US. In December, she said explicitly that America would be Venezuela’s “main ally.” She has spoken about opening the country to Western investment, rebuilding the energy sector with foreign capital and transforming Venezuela from a security liability into a partner for the US. After Maduro’s removal, she publicly thanked Trump and Rubio and described the outcome as a potential “win-win” for both countries.

Yet Reuters reported last week that US officials remain wary of her return because they fear her presence could disrupt the transition Washington is supporting around Rodríguez. Machado’s movement is not part of the current US-backed negotiating mechanism, while Delcy’s government has become Washington’s main Venezuelan interlocutor.

That raises a question that goes beyond Machado.

The postwar parallel

The Trump administration has repeatedly defended its approach as a matter of sequencing. Venezuela needs stability first, then economic recovery and reconciliation, and “ultimately democratic transition.” The White House argues that rebuilding the economy is a precondition for elections rather than a substitute for them.

There is a serious argument behind that position. Venezuela inherited a devastated public administration, a crippled oil industry, enormous external debt and institutions hollowed out by years of authoritarian rule. Abruptly dismantling the bureaucracy, military hierarchy or State-owned companies could reproduce some of the worst mistakes made in other post-authoritarian or post-conflict transitions. A functioning State matters.

But preserving the State is not the historical equivalent of preserving the regime.

After World War II, the United States repeatedly confronted versions of this distinction. In Japan, the occupation retained Emperor Hirohito partly because American planners believed institutional continuity could make the transition less destabilizing. But keeping the emperor did not mean preserving the emperor’s capacity to decide who could participate in Japanese politics. On October 4, 1945, General Douglas MacArthur ordered the Japanese government to remove restrictions on political and civil liberties and release political prisoners. Among those released were prominent Japanese Communists who had been imprisoned by the old order. American officials later acknowledged that the resulting political opening was so broad that some Japanese mistakenly concluded that the occupation itself favored the Communist Party.

When it comes to the geopolitical role of the US, the Trump administration depicts itself as the decisive actor reshaping Venezuela. When questions turn to the lack of institutional reforms, Venezuela’s sovereignty becomes a much more convenient explanation for the limits of American responsibility.

Something similar happened in Italy. The Allies initially worked through King Vittorio Emanuele III and Marshal Pietro Badoglio because they needed an Italian government capable of administering the country during the war. At the same time, political exiles were allowed to come home and anti-Fascist parties returned to public life. The contrast is particularly striking in the case of Palmiro Togliatti, the leader of the Italian Communist Party and a former senior official of the Communist International. When Togliatti sought to return from Moscow in 1944, the US State Department explicitly said it had “no objection.” He returned and soon participated in the new political order.

Neither Japan nor Italy offer a blueprint for Venezuela. The historical circumstances were radically different, and American occupation policy was hardly politically neutral. But the underlying distinction is useful. Administrative continuity did not require preserving the old regime’s monopoly over politics. The State could survive while the political system opened around it.

That is precisely where Washington’s current Venezuelan policy becomes harder to understand.

The art of deflecting

Keeping experienced civil servants at their desks is State continuity. Avoiding a wholesale purge of the armed forces may be State continuity. Keeping PDVSA pumping oil while new rules are negotiated is State continuity. None of those choices inherently require preventing opposition politicians from returning, organizing, or campaigning.

And Venezuela’s political opening remains incomplete. A UN Fact-Finding mission reported this month that, despite prisoner releases and some liberalization, the structures responsible for years of repression remain largely intact. Officials linked to previous abuses remain in important positions, restrictive laws survive and arbitrary detention and mistreatment have not disappeared.

This makes the widening gap between economic opening and political opening particularly important. Washington is moving rapidly on the former. Rodríguez traveled to New York accompanied by officials discussing oil, mining, debt restructuring and access to international financial institutions. American companies are negotiating their return to Venezuela’s energy sector. Trump has made the oil agreement one of the centerpieces of his foreign-policy narrative.

At the United Nations this week, Trump went further. After celebrating Maduro’s capture, the release of prisoners and Washington’s relationship with Venezuela’s current leaders, he described the new oil arrangement in unmistakably triumphalist terms. “It was a war,” he said, before invoking the old expression: “to the victor belong the spoils.” He then presented Venezuela as proof that the US would once again impose its power against threats in the Western Hemisphere.

If Machado returns, travels freely, organizes her movement, holds rallies and begins preparing for an eventual presidential campaign, Delcy’s continued presence can still be understood as part of an administrative transition.

The rhetoric creates an uncomfortable asymmetry. When discussing oil, geopolitical alignment or American power, the administration depicts itself as the decisive actor reshaping Venezuela. When questions turn to the remaining coercive apparatus, restrictions on political competition or the continued exclusion of important opposition actors, Venezuela’s sovereignty becomes a much more convenient explanation for the limits of American responsibility.

Washington cannot have unlimited responsibility for everything that happens inside Venezuela. Delcy Rodríguez still controls a government, a bureaucracy and a security apparatus of its own. But the US plainly possesses enormous leverage over the political and economic environment in which that government operates. The history of Machado’s attempts to return suggests that this influence may extend even to whether neighboring governments are prepared to help a Venezuelan opposition leader reach her country.

That is why Machado’s return matters beyond Machado herself.

If she returns, travels freely, organizes her movement, holds rallies and begins preparing for an eventual presidential campaign, Delcy’s continued presence can still be understood as part of an administrative transition: an imperfect bridge between the regime that existed under Maduro and a genuinely competitive political order.

If her return continues to be regarded as destabilizing, however, the logic starts to invert. Political competition itself becomes a threat to stability. The government is no longer merely being preserved so that the State can function while politics reopens; political reopening is being limited because it might endanger the government being preserved.

Venezuela does not need another collapse of the State. But avoiding State collapse and protecting the political equilibrium inherited from chavismo are two different objectives.

The distinction between them may ultimately define this transition.

Caracas, September 22, 2026 (venezuelanalysis.com) – Venezuelan Acting President Delcy Rodríguez and US President Donald Trump held a first face-to-face meeting on Tuesday night in New York amid the rapid rapprochement between Washington and Caracas.

The closed-door gathering took place at the Lotte New York Palace hotel during a reception for world leaders participating in the ongoing 81st session of the United Nations General Assembly. Trump was flanked by Secretary of State Marco Rubio, Treasury Secretary Scott Bessent, and other White House officials, while Rodríguez was joined by Foreign Minister Félix Plasencia.

The Venezuelan government published photos of the meeting, with the two leaders smiling for the cameras in front of the countries’ flags.

On her social media channels, Rodríguez praised the “historic” sit-down with Trump and reported that the discussions focused on strengthening “cooperation in strategic areas such as energy and mining.”

“We thanked President Trump and his government […] for its support for Venezuela’s reinsertion into multilateral spaces,” she stated. “Venezuela and the United States share a historic relation that, in this new era, we must drive forward through dialogue.”

Tuesday’s summit was the first between US and Venezuelan leaders since a brief encounter between Barack Obama and Nicolás Maduro during the 2015 Summit of the Americas in Panama.

Rodríguez is also set to be the first Venezuelan head of state to participate in the UN General Assembly since Maduro in 2018, during Trump’s first term. In 2019, then as vice president, Rodríguez addressed the UN General Assembly, denouncing US sanctions as a form of “state terrorism” and accusing Trump of “sticking his imperial claws” against Venezuela and Cuba

The high-level meeting follows a rapid diplomatic rapprochement between Caracas and Washington following the January 3 US bombings and kidnapping of President Nicolás Maduro and First Lady Cilia Flores. In the months since, the acting Rodríguez administration has fast-tracked energy and mining reforms tailored to US and Western corporate interests while also realigning the country’s foreign policy.

The Venezuelan acting president and her diplomatic team have yet to mention Maduro in their New York trip. Maduro and Flores are presently detained in Brooklyn, some 10 miles from the UN headquarters, and facing drug trafficking conspiracy charges. Both pleaded not guilty.

At the time of writing, the White House has offered no details on Tuesday’s summit with Rodríguez.

However, in his UN speech earlier in the day, Trump hailed the US’ military operation to kidnap “outlaw dictator” Maduro.

“Our actions in Venezuela are proof that the United States will no longer permit threats to America to gain a foothold anywhere in the Western Hemisphere. And if necessary, we will use our unmatched military might to secure the vital national interests of the United States,” he said.

Trump went on to boast about US corporations entering the Venezuelan energy sector and praised a recent deal giving privileged access to more than 20 percent of the Caribbean nation’s reserves to a Pentagon-controlled firm as “perhaps the biggest deal ever made.”

“To the victor belong the spoils,” he added. Rodríguez and the Venezuelan delegation were shown listening to Trump’s speech in the UN live broadcast.

Prior to the high-profile Trump sit-down, Venezuela’s acting president held meetings with Inter-American Development Bank (IDB) President Ilan Goldfajn, International Monetary Fund (IMF) Managing Director Kristalina Georgieva, and World Bank President Ajay Banga to discuss Venezuela’s reintegration into international financing and cooperation mechanisms.

“We are promoting new stages of engagement with the international financial system and working to ensure joint efforts for the benefit of the Venezuelan people. Venezuela’s future is built through partnerships, hard work, and the firm determination to keep moving forward and creating opportunities for our nation,” Rodríguez said. 

She also met with UN Secretary-General António Guterres, with whom she reportedly discussed Venezuela’s political and economic situation, cooperation with the UN, human rights, and dialogue.

The Venezuelan leader likewise held a brief conversation with Spanish Prime Minister Pedro Sánchez and Foreign Minister José Manuel Albares.

Edited by Ricardo Vaz in Lisbon, Portugal.

Folks confuse the medicine with the symptoms when they ask for dollarization or argue against it, as if the magic wand of switching to the dollar would cure the deep debt and the fiscal imbalances of the broken State-led model that crippled Venezuela.

Marcos Planchart wrote on this site last week that “it is certainly not the paper where the bolívar is printed the element that corrupts people or destroys the economy: it is the system behind it.” I agree with that sentence entirely. However, dollarization is not the first decision. There is a sequence that comes before it, and it is the sequence, not the currency, that determines whether any of this holds.

Antonio Ecarri and Steve Hanke want to change the unit of account. Planchart wants to keep it and repair the institutions standing behind it. Both are arguing about the currency. The currency is the second question, and it answers itself once you have answered how to fix the fiscal imbalance. 

Those imbalances have four fixes: a legitimate and credible government, a closed deficit, restored conditions for private investment, and an open and transparent market for trading bolívares and dollars. Or you can dollarize. Notice that the first four require no change in the unit of account at all.

Here is the simplified mechanism: A government running a deficit it cannot finance has the Central Bank issue bolívares to cover it. The new money goes looking for dollars and for hard assets, and the rate moves. Running an official rate alongside the market one does not stop that. It only decides who captures the difference.

Dollarization is a reasonable destination after the fiscal work and a ruinous substitute for it. Do the work and you may not need it, because the inflation it was sold to cure will already be gone. Skip the work and it will cost you more than the bolívar does. Redundant or ruinous. There is no third case.

The three consequences, one at a time

Planchart lists what the case for dollarization claims: eliminating inflation, forcing fiscal discipline, eradicating corruption. Take them in that order.

First: it does eliminate inflation. This is Hanke’s most popular claim, and it is true. Ecuador dollarized in January 2000. Inflation averaged 39% a year through the 1990s and 2.9% from 2003 to 2024. The policy does achieve inflation reduction, and it does so quite fast.

Now notice what that concession costs the other side. Inflation is the entire platform. It is why the argument is popular in Caracas, and why anyone is listening to Ecarri in 2026. The harder thing to see is this: if we stabilize the fiscal accounts and jump-start private investment, inflation can be tamed and the case for dollarization goes with it. You cannot sell a cure for a disease the patient no longer has.

Second, it does not force fiscal discipline. Ecuador ran deficits in twelve of the thirteen years from 2013. The one exception was 2022, by four hundredths of a percentage point. Public debt went from 19% of GDP in 2011 to 64% in 2020, and Ecuador defaulted that year. It is 54% now. Growth averaged 6.4% a year from 2011 to 2014 and 1.4% from 2015 to 2019.

The mechanism is the one Planchart names himself. He warns that dollarization leaves a country “even more vulnerable to external shocks, such as a sudden plunge in oil prices.” That is precisely what happened to Ecuador after 2014. Oil fell, Ecuador could not devalue, and the shock had nowhere to go except the budget, and from the budget into debt and into lost growth. He states the fear and never uses the country it happened to. It is the best evidence in his own case and he leaves it on the table.

The deficit does not disappear when the currency changes. It simply has to be paid in a currency you cannot print.

Dollarization took away the printing machine, not the deficit, so the adjustment fell on debt instead of on prices. Ecuador does not show that dollarization is harmful. It shows that it is not enough. Of its two defaults, 2008 is the weaker example: it fell in a surplus year and was a choice rather than a financing crisis.

Third, regarding corruption, Planchart has already answered it, and I will not repeat a good argument badly. The exchange differential was never an oversight. It was an instrument. Change the currency and the people who built it still hold the pen.

What getting the sequence wrong costs

Planchart says a failed dollarization would force the government into more debt and severe cash shortages. He is right. Here is the size of it.

We ran the model with the same economy twice from the same starting position, $13.4 billion of reserves in 2026, changing one thing. Dollarize now on today’s deficit, alter nothing else, and the state’s dollar position will fall through zero in the third year and reach minus $24 billion by 2034. Dollarize after fiscal consolidation, with private investment recovering, and the same position accumulates to plus $127 billion. Same reserves, same model, one difference.

The deficit does not disappear when the currency changes. It simply has to be paid in a currency you cannot print.

Why 576% inflation sits on a deficit near 6%

Planchart gives the number: inflation reached 576% year on year in July. The mechanism above explains the direction. It does not explain the size, and the size is the interesting part.

The bolívar base has collapsed; measured at the parallel rate, it was around $15 billion in 2011 and 2012. In July 2026, it was $1.7 billion. The base that can be monetised is a ninth of what it was.

In 2013, Gino Bettocchi and I wrote about a State running a consolidated deficit of 15% to 20% of GDP, including PDVSA and FONDEN. On the narrower central government measure that is still published, the deficit has roughly halved since then, from 9.9% in 2012 to 5.8% last year. A far smaller deficit now carries the inflationary force that an enormous one carried then, because there is so little left to dilute. That cuts against both camps. It is not evidence that the bolívar is cursed, and it is not evidence that only the dollar can fix it. It is arithmetic about a very small base.

Where I actually disagree

Planchart wants to keep the bolívar permanently, in part to preserve room for industrial policy. The unit of account does not carry that weight, in either direction.

What breaks or holds a monetary regime is the deficit, private investment, and the institutions behind them. Those three decide the outcome, whether prices are quoted in bolívares or in dollars.

The argument about maintaining the unit of account in bolívares is about the State’s capacity to protect and nurture strategic industries. But industrial policy is paid for by a State with fiscal room, and Venezuela has neither. It becomes possible after stabilization, not instead of it.

Without credible rules, there is no private investment. Without investment, there is no oil and no tax base. Without revenue, there is a deficit. And a deficit breaks any exchange rate regime, whether it is denominated in bolívares or in dollars.

Planchart may well be right. His is a claim about what Venezuela becomes over the medium and long term; mine is about what stops the bleeding now. Our hope is that between the two visions, readers get the order of operations.

His best line is that starting dollarization under chavista rule is like handing the reconstruction of the oil sector to a man who helped destroy the electricity grid. I would make it structural rather than personal, because it is an argument about order.

Stage one is not monetary. It is a legal framework credible enough that private capital comes back. Without credible rules, there is no private investment. Without investment, there is no oil and no tax base. Without revenue, there is a deficit. And a deficit breaks any exchange rate regime, whether it is denominated in bolívares or in dollars. Once those policies are in place, they will open the market and the premium will close on its own. Then, the decision about Venezuela adopting the dollar formally can be taken calmly, from strength, rather than desperately as a rescue.

In 2013 we wrote that the choice was reform or hyperinflation. Maduro chose hyperinflation, and it ran from 2017 to 2021. The 2026 version of that choice is not dollar or bolívar. A currency is imported. A State is built.

“The Kangaroo Peg” was written by Gino Bettocchi and Jesús Bolívar, Second Year Policy Analysis, Harvard Kennedy School, 2013, advised by Ricardo Hausmann. The thirteenth year update, with both figures, the model and its sources, is available here.

You can also track all macroeconomic metrics in the UnoPago monitoring website.

The oil “mega-deal” signed between the US and Venezuela has caused major repercussions on plenty of themes: from the legality and timeframe of the agreement to the economic and political implications and, last but not least, the controversial role of Alejandro Betancourt.

A couple of issues are also missing from recent discussions: the effects of these new deals on Venezuela’s environment and its implications for the global climate crisis.

One exception was the coverage made by the NPR’s “All Things Considered” program, where energy and climate correspondent Julia Simon interviewed Paasha Mahdavi, a political science professor at University of California, Santa Barbara, who has this to say about what the new Orinoco Belt developments by major oil company Chevron could do.

“This expansion is effectively a carbon bomb. And so if Chevron does produce this field, that’s roughly 52 million tons of carbon dioxide equivalent per year additional. That is a huge number.”

On September 2nd, the same day those deals were signed in Miraflores Palace, the United Nations Environmental Program released the report “Limiting Overshoot,” which indicates that the 1.5° threshold to limit global warming established in 2015 by the Paris Climate Accords was already crossed and therefore the world must prepare for the fallout.

But in the last few days, several Venezuelan environmental NGOs and other civil society groups are sounding the alarm about the negative consequences that those agreements could produce here. Mongabay published this map about the areas that are impacted by oil extraction in Venezuela.

Venezuelan NGOs Clima 21 and Provea made public a joint statement in which they say that “the economic recovery cannot be made at the expense of environmental human rights. No economic interest can prevail over the constitutional and international right to a healthy, safe and sustainable environment…”

They proposed five points of commitment for all involved, which include transparency and public information, effective enforcement of environmental obligations, urgent management of oil spills, protection of vulnerable communities and a transition to a sustainable model for the country.

Local NGO Azul Ambientalistas claimed that in recent months there have been visible signs of spills and gas leaks in the Lake Maracaibo area, which increased after the reactivation of activities there earlier this year.

Alejandro Alvarez, director of NGO Clima 21 told Caracas Chronicles about what this overall commitment could entail: “It must take into a medium-to-long term strategic plan of reducing the fiscal dependence of the oil rent through investment in areas not related to the extraction and use of fossil fuels. There are already forecasts that could define alternative economic areas to generate currency without the extraction of petroleum.”

In similar terms, Transparencia Venezuela mentioned the need to adjust any oil investment and development to what’s established in Article 129 of the Constitution, including “environmental and socio-cultural impact studies” and “the obligation to preserve the balance…”

But some went further and openly denounced the US-Nabep deal as the surrender of our national sovereignty and civic rights, as Venezuelan sociologist Emilianio Teran-Mantovani wrote in an article for the Venezuelan Observatory of Political Ecology, an organization that he co-founded. 

“The new Oil Agreement is the result of this process of political decomposition that has been unfolding in Venezuela for years; and it is the crowning achievement of the capitulation and dismantling of oil nationalism, which had already begun under Maduro and is now being fully unleashed through U.S. intervention…

“Ultimately, this means that Venezuelans themselves have no place. They hardly matter. Their decisions, expressed, for example, in the July 28, 2024 elections, do not matter. Neither do their social and labor rights. And the environment is even less relevant, an area that has been rendered completely invisible in this conflict.”

“There is no National Policy, National Strategy, nor a National Plan of Adaptation and Mitigation to Climate Change. There’s neither a Climate National Budget nor a National System for an Inventory of Greenhouse Gases…”

Besides these statements, the issue of how this oil deal will affect our surroundings has taken a backseat to other concerns while clouded by a lack of details and overall uncertainty around it, despite the promises of a prosperous recovery made by government officials in Caracas and Washington. 

In the meantime, the problem of incidents like oil spills continues to be present to this day, with the most recent one occurring on the coast of Lake Maracaibo near Cabimas, as local NGO Azul Ambientalistas claimed that in recent months there have been visible signs of spills and gas leaks in the lake, which increased after the reactivation of activities in the area earlier this year.

Oil spills have sadly become commonplace over time, but reliable data on the matter is hard to come by, with NGOs like Clima 21 and the Venezuelan Observatory of Political Ecology filling the gap that the State is not providing. 

“This possible impact (of the pollution produced by the projects of the oil deals) would add to the systemic chronic environmental crisis of the Venezuelan oil industry, which has a very high accident rate because of the abandonment of safety protocols and protections to the communities and ecosystems in the most affected areas. Our concern is the absence of guarantees in those agreements that these problems will be attended to and solved.”

And then there’s the concern of climate change and its already visible effects around the world. At the moment, the ongoing El Super Niño climate event is exacerbating temperatures, causing historical heatwaves like the recent one in Europe and creating serious worries about food crops and other essential natural resources in many nations, including here in Venezuela. 

Evidence of how climate change has directly affected Venezuela can be found in the second academic report on climate change (DRACC), which was formally presented last December by the Venezuelan Academy of Physics, Mathematics and Natural Sciences. In its findings is the acknowledgment that the average temperature in the country has risen 0,22 °C per decade between 1980 and 2015, while global warming is responsible for anomalies in rainfall.

But the most damning conclusion is the complete disregard coming from the Venezuelan State.

“This is an important theme in which the government has made failed or incomplete advances” Alvárez, mentioning two failed projects: wind farms in Paraguaná and solar panels for  an indigenous community in Amazonas state, which ended up abandoned.

“There is no National Policy, National Strategy, nor a National Plan of Adaptation and Mitigation to Climate Change. There’s neither a Climate National Budget nor a National System for an Inventory of Greenhouse Gases… …the climate institutional weakness accentuates the vulnerabilities of the national territory to the physical threats of the current climate change…”

“The climate change issue has completely disappeared from the Venezuelan political agenda. We have no information on the position of the government in the next international meetings on the matter,” Alvarez told us. He added that “in any case, we need a commitment of the State to fulfill the obligations of the Paris accords and the COP30 (the most recent UN’s climate change conference held in Brazil in November 2025) that promote an energy transition outside of fossil fuels.”

Given this assessment and the Trump administration’s doubling-down on the exploitation of fossil sources of energy, this oil deal could simply make those physical effects even worse. 

Parallel to this is the inclusion of how clean energy sources like solar or wind could not only assist in alleviating the electricity shortage but create new opportunities for our economy. Now, it seems like the only one considered is the hydroelectric power that we largely depend on.

“This is an important theme in which the government has made failed or incomplete advances” Alvárez, mentioning two failed projects: wind farms in Paraguaná and solar panels for  an indigenous community in Amazonas state, which ended up abandoned.

Overall, any discussion about the environmental consequences that this controversial oil deal could have for all Venezuelans is not at the forefront. It is not entirely erased from view, however. 

The short-term argument also brings a long-term one that our society has been dodging for many years: finding a suitable compromise between the needs of our economic apparatus that require immediate attention and that our hydrocarbon industry can provide, while keeping safe basic things like the air we breathe or the water we use and even trying to preserve the natural wonders that this beautiful country of ours offers.

Venezuelan political junkies witnessed an amusing phenomenon in the past few weeks: former presidential hopeful Henrique Capriles embraced a derisive meme about himself that suddenly became popular. Or more precisely, he, too, started joking about his own memefied persona, el manguanguas, the weirdly energetic, repetitive and even creepy politician that appears at your doorstep and, if you let him inside, sits down for hours to hablar de la situación while emptying your family’s coffee reserves. 

Capriles is one of the most memeable characters in our universe and the manguanguas moniker is not a rarity. It comes from a 2019, early Juan Guaidó era livestream where he praises Guaidó and rants at Maduro for virtually terminating political competition a year before: “¡Coño, qué manguangua! ¿Ah?” (an indignant “hell, that’s convenient, huh?”).

The whole thing does say a couple of things about our (still overwhelmingly digital) public sphere and the memefication of Venezuelan politics. First, it seems many people were more eager to have a laugh and scroll down the manguanguas rabbit hole than to learn, say, about the US-Nabep deal and the involvement of bolichico king Alejandro Betancourt, a material architect of the crisis that remains the biggest handicap to the quality of life of Venezuelans. To put it another way, el manguanguas was getting an insane amount of attention while the US overlords faced their biggest reputational crisis in Venezuela since January 3.

The meme emerged because Capriles has been touring Miranda while Venezuelan politics become increasingly defined by what a group of gringos in navy blue suits decide to tweet on a Friday evening.

We’re not making a great discovery here—most people know memes can have spectacular traction when it comes to political messaging and campaigning. The Venezuelan jodita, the national propensity to make jokes about everyone and everything even in the midst of tragedy, can make memes an even stronger weapon in our digital sphere. It seems someone made Capriles aware of that: he first reacted by complaining on X, accusing “those who are paying a millionaire campaign in production and publicity” of attacking him on social media. Then he acknowledged it in a friendlier fashion: “They say I visit your homes to steal your coffee,” he said in a September 1 video in Barlovento. “They mock me because they don’t want to see me coming here.” In a later post, he made a toast with other townspeople raising tiny coffee cups: “Por la manguangua!”

Capriles decided to tag his recent posts with #OperaciónManguangua and the whole thing has been helping him—engagement around his account grew and became more positive as a result, though he still doesn’t dare to open the comments section in his X handle. It’s good news for him after a few years of unpopularity, when he formally joined the faux opposition camp. If not for the events of January 3 and a still dim opening of the political arena, Capriles would be flirting with irrelevance, just a washed-up face in the parliamentary seat Jorge Rodríguez gifted him in 2025, begging Iris Varela or Jorge Arreaza for a chance at the chamber’s microphone. We wrote about his acts and decisions extensively—or his lack of courage and effectiveness—in the late Maduro era. But Capriles is not yet irrelevant, at least in my opinion.

The meme emerged in the first place because Capriles has been touring the state of Miranda this summer—a post-Maduro redemption tour, if you will—while Venezuelan political events again become increasingly defined by what a group of gringos in navy blue suits decide to tweet on a Friday evening. A few years ago, Capriles campaigned strongly about “bringing politics back to the country” in a not-so-slight dig at Guaidó, Leopoldo López, and the Trump-backed interim government they led. He now recognizes María Corina Machado as the rightful opposition leader and criticizes her exclusion from the so-called negotiations, so this is not about a plot against her.

Venezuelan politics started to see some interesting movements a few months ago, but these have become less and less intense as the rest of the opposition waits for Machado’s return or the green flag of an election date.

As weak and isolated as he may look, Capriles is one of the few opposition people with actual freedom to call things what they are when it comes to the United States and Venezuela. That is not the case for Machado, Juan Pablo Guanipa, or other figures who might be playing a role behind the scenes. Capriles didn’t have to wait for Marco Rubio’s explanations five days later to make his case about the US-Nabep deal. He was quick to assert that the oil belonged to the people on the day of Trump’s bombastic announcement, and made some sensible questions: What’s the deal’s scope? What’s its legal basis? What do Venezuelans receive, and under which conditions? Elliott Abrams, the GOP hawk and special envoy in Trump’s first term, noted Capriles’ almost lonely stance as a sign of the country’s worrying lack of politicians who are truly independent from Washington (to make his point, the former operative of Ronald Reagan also quoted the Venezuelan Communist Party in his Washington Post op-ed).

Will the manguanguas joke give him an enhanced platform? Maybe for a bit, though Capriles has a habit of messing things up and making people grow tired of him rather quickly. Right now, he is being noisier than at that time he was supposed to run for the 2023 primaries, only to chicken out in the final stretch, knowing he stood no chance against Machado. However, the videos he has been posting of rural communities in the state he once governed do carve out an accurate picture of how the country looks outside a few big cities. In the Barlovento area, Capriles is seen visiting a ramshackle school where the roof looks about to fall down, with a disgusting pile of books and furniture eaten by heat and dust as a library, its walls and windows looking flimsy when not broken. Another post shows a nearby ghost town, Tacarigua de la Laguna, where Capriles records an empty beach in front of him and an abandoned building behind—the only living thing nearby being a baby cat. Mire, aquí lo único que quedó es el gatico, he says.

In March, we wrote that the political heat map of Venezuela was starting to see some interesting movements, but these have also become less and less intense while the rest of the opposition waits for María Corina’s return or the green flag of an electoral calendar to light up the party. Maybe, if the people are kept waiting, angry or disappointed with the Americans as the opposition watches from the dugout, Capriles will remain the only cat making noise. Mire, pues vamos a ver.

Caracas, September 9, 2026 (venezuelanalysis.com) – The president of Venezuelan state oil company PDVSA, Héctor Obregón, backed the recent agreement with the Trump administration as a “win-win relationship” on Monday.

“We signed Productive Participation Contracts where we put forward crude reserves and qualified personnel. What were we missing? Foreign capital,” he said in an interview with Unión Radio.

Productive Participation Contracts (CPP) are concession-type agreements whereby energy projects are turned over to private corporations which run operations and commercialization while paying a negotiated portion of proceeds to the Venezuelan state.

The recent oil deal, hailed by Trump as “the biggest in history,” will see Venezuela transfer 17 prime oilfields, containing 65 billion in proven crude reserves, to private operator NABEP. The projects are split between extra-heavy crude fields in the Orinoco Oil Belt and mature light- and medium-crude ones in the Lake Maracaibo basin.

Obregón insisted on the mutual benefits, explaining that Venezuela will collect taxes and royalties while the US will be able to supply its domestic demand. Regarding the agreement’s timeline, which the White House has claimed to span 100 years, Obregón stated that the concession is for 25 years but may be renewed for similar periods “as many times as necessary.”

After initially vowing that NABEP would invest US $100 billion in the oilfields, a figure repeated by Venezuelan officials, the Trump administration changed the pledge to “more than $10 billion.” 

According to a White House “fact sheet” on the deal, the US State Department will be able to secure 20 percent of the NABEP’s output at cost and have a right of first refusal over the remaining 80 percent.

Obregón suggested that Washington could secure additional benefits, indicating that a reference $65 barrel would have a $15 “sales discount.” The oil official likewise estimated capital and operational expenditures at $12-15 and stated that NABEP would never secure a smaller portion of proceeds than the Venezuelan state, with the percentage increasing for greenfield projects.

The $19 revenue estimate offered by Venezuelan officials as the government’s take for a reference $65 barrel is significantly lower than the benchmarks established under the 2001 Hydrocarbon Law approved by former President Hugo Chávez and subsequent reforms. Under the previous framework, only PDVSA or PDVSA-majority joint ventures were allowed to operate oilfields, with the Venezuelan state securing as much as $0.80 for every $1 of oil proceeds in the latter case.

NABEP, owned by Venezuelan oil mogul Alejandro Betancourt, will grant a 35 percent stake at no cost to the Pentagon’s Office of Strategic Capital (OSC). Washington will likewise have veto power over NABEP’s board of directors. Betancourt has faced corruption accusations in Venezuela, with authorities issuing an arrest warrant in 2022 that was later dropped. For its part, the Trump administration has sought to halt money laundering investigations against the Venezuelan businessman both in the US and in Switzerland.

Obregón went on to acknowledge that Venezuelan export revenues are currently deposited in a US Treasury account before US officials decide on the disbursement amounts and timings back to Caracas.

“There is a state-to-state agreement to receive Venezuelan funds in Treasury accounts,” he disclosed, echoing Washington’s assertion that its seizure of Venezuelan export proceeds aims to protect them from potential creditor claims. 

“The channeling of revenues through the US Treasury could be considered a protection measure, since there are debt claims against PDVSA and creditors could target our accounts,” he argued.

Neither US nor Venezuelan authorities have disclosed the amount of revenue collected and disbursed back to Caracas. Luigi Pisella, an advisor to Acting President Delcy Rodríguez, claimed that the Trump administration is deducting the costs of its January 3 military operation against Venezuela from the country’s funds.

The costs of goods and services supplied by US-based exporters to Venezuela are also being directly deducted from the funds held in the Treasury accounts.

Apart from controlling export earnings, US officials have publicly participated in a pro-business overhaul of the Caribbean nation’s hydrocarbon law and regulations, including reviewing drafts of the legislation.

The Trump administration has maintained sanctions on the Venezuelan oil industry while issuing licenses for select Western corporations. US Energy Secretary Chris Wright oversaw the signing of agreements with Chevron, Eni, and smaller US-backed energy firms during a visit to Caracas earlier this month.

Edited by Lucas Koerner in Philadelphia, USA.

A few weeks ago, non-chavista politician Antonio Ecarri and American economist Steve Hanke managed to unearth one of Venezuela’s longstanding and unsettling debates: whether the country’s economy should be formally dollarized. After decades of economic hardship brought by repeated devaluations, hyperinflation and scarcity, the country’s monetary regime is heavily fragmented. 

De facto dollarization rules most of the transactions, while the bolívar, crypto stablecoins, euros and the currencies of neighboring countries split the rest of the monetary market share used to maneuver through Venezuela’s complex economy. With the US pushing for the country’s economic stabilization to increase trust in foreign investors, the fragmented monetary ecosystem can be detrimental to the process made so far.

Venezuela’s economic outlook has improved after Maduro’s capture and since the US took control over Delcy’s decisions. Mainly because of a sharp recovery of oil exports to the US recovered sharply; by April, these were up 192% from their 2025 average. The energy sector is spearheading the recovery while attempting to partially compensate for the devastation caused by the twin earthquakes. GDP growth projections for Venezuela are forecasted at 5.8%, almost four times the country’s 2025 growth (1.5%). Yet the threat of inflation and instability compounds investors’ worries about entering the country. After repeated announcements by the interim regime promising to close the exchange gap and tackle inflation, their actions show otherwise.

Delcy continues to erode the bolívar by stimulating the money printer needed to feed chavismo’s patronage system. Exchange rate controls, which have long incentivized corruption and inflation, are still there. On the dollar side, credit loans and transactions remain “officially” forbidden, creating an artificial tax on USD transactions and fear amongst businesses who can be punished for their use.

Eliminating inflation would require abolishing all existing exchange rates and creating a new one based on an agreed technocratic approach.

The result of this unaddressed monetary disaster has been a persistent rise in inflation, which increased by 6.1% in July, bringing year-on-year inflation to 576% and 2026 cumulative inflation to 175.5%.

This is not the first time the call for dollarization has been in the spotlight in Venezuela. Nonetheless, US control over the country’s economy may increase the possibility of it becoming a reality. While dollarizing might be an effective measure to rapidly generate trust and reduce inflation, it raises important questions about its implementation under the interim regime and the future of Venezuela’s monetary sovereignty. Similar to Trump’s oil deal or the post-earthquake reconstruction, all discussions and actions are taking place behind the scenes, sidelining the very population that will have to deal with its consequences. 

The US dollar is not the solution

Discussions regarding dollarization have primarily focused on three benefits: eliminating inflation, forcing fiscal discipline, and eradicating corruption. However, as long as those managing the dollarization process are the same ones who have guided Venezuela to the worst economic crisis in the region’s history, the result might be equally as bad but with a different set of consequences. 

Hanke asserts that no preexisting institutional, fiscal or political conditions are necessary for dollarization to be successful. However, this process requires the willingness of all three areas to move forward. Eliminating inflation would require abolishing all existing exchange rates and creating a new one based on an agreed technocratic approach. Currently, there is no incentive for anyone in the interim regime’s leadership to converge the exchange rates.

A struggling or failed dollarization plan could further erode trust while leaving the country even more vulnerable to external shocks.

The exchange rate differentials have not been an economic policy mistake overlooked by chavismo. These have been an integral part of chavismo’s strategy to undermine and replace old political elites with select, loyal ones. Long ago, they became crucial to maintain the status quo. There are no signs in favour of change in this area, as economist Juan Comella argued in May. Doing so would compromise the structure that keeps her in power.

A struggling or failed dollarization plan—which forces the government to take on further debt, experience severe cash shortages and fundamentally depend on its commodity exports—could further erode trust while leaving the country even more vulnerable to external shocks, such as a sudden plunge in oil prices. The neoliberal constraints posed by dollarization, like an extremely limited Central Bank to aid the government, will not fix decades of institutional erosion, but only try to avoid it while possibly unleashing a fresh round of obstacles that menace an already fragile economic recovery.

The bolívar is not the problem

Decades of monetary policy failures made the population skeptical of the bolívar. For long enough, the system and institutions have incentivised and even rewarded the wrong people to take advantage of its vulnerabilities at the expense of the population and evading any personal consequences.

It is certainly not the paper where the bolívar is printed the element that corrupts people or destroys the economy: it is the system behind it. It is not far-fetched to think of a plan that grants the Venezuelan Central Bank complete independence, empowering the correct people to safeguard the economy from the risks of inflation while maintaining government spending in line and preparing for external shocks.

Relinquishing our monetary sovereignty would be a mistake in a world where governments actively participate and spend to tackle modern challenges, including AI and natural disaster relief. China’s rise as a global power has been, in part, a consequence of decades of industrial policy under intense government intervention. The US and EU have started to catch up in recent years. The US has done so with the CHIPS and Inflation Reduction Act under Biden and, most recently, with the Trump administration imposing protectionist tariffs and taking equity stakes in major companies with the aim of safeguarding US interests in key sectors. The EU aims to increase competitiveness under the Clean Industrial Deal and the Industrial Accelerator Act. If Venezuelan leaders seek to move past the country’s commodity dependence, climb up in the global value chain, become competitive and diversify the economy, industrial policy will be crucial. Dollarization would compromise those goals.

Starting a dollarization process under chavista rule is similar to entrusting the reconstruction of Venezuela’s oil sector to a businessman who contributed to the destruction of the country’s electricity grid.

Foreign investment will be the driver of short- and medium-term recovery and growth for Venezuela. However, industrial policy will be crucial to guide the long-term objectives of the country. For this, Venezuela needs the bolívar, even if it’s in an open and competitive currency market where the people decide which currency earns their trust.

The Ecarri-Hanke duo surprised public opinion not only because of their proposal but also because of the odd pairing. Ecarri represents the efforts of Venezuelan politicians with limited legitimacy to enter the spheres of influence in Washington, and also chavismo’s ability to neutralize them. Hanke only views Venezuela as part of a larger plan to promote and deepen the use of the dollar internationally, in a global context that increasingly mistrusts the US currency and is hedging against it.

Ecarri is the result of a system that empowers the wrong people. Hanke represents the oversight of the reality on the ground and the impact Venezuelans will have to absorb. Both display the same shortcomings of Venezuela’s monetary institutions over the past decades. Their proposal simply tries to hide the sun with one finger instead of addressing the historical root causes of Venezuela’s monetary instability.

Starting a dollarization process under chavista rule is similar to entrusting the reconstruction of Venezuela’s oil sector to a businessman who contributed to the destruction of the country’s electricity grid. Policy should depart from both trauma-instilled calls for complete dollarization and a patriotic defense of the bolívar. Instead, it should focus on economic stability and our capacity to meet the challenges of tomorrow.