This week, the United States imposed sanctions on Venezuelan oil firm PDVSA in an attempt to force President Nicolas Maduro to relinquish power to opposition leader and self-declared interim president Juan Guaido. Maduro responded by calling the sanctions criminal and vowed not to allow ships with crude oil destined for the U.S. to leave Venezuela without being prepaid.
The move is the latest setback for Venezuela’s oil industry. Years of underinvestment and government mismanagement, including siphoning off profits to pay for social programs, have taken a heavy toll. Production has fallen from roughly 3 million barrels per day in the late 1990s to 1.3 million barrels per day in 2018. Changes made under the Maduro government and that of his predecessor, Hugo Chavez, have led to a decline in foreign investment and a spike in debt. The country’s oil sector is estimated to owe creditors some $100 billion. Whatever the cost of the latest U.S. sanctions, the industry’s downward spiral has no end in sight.