Venezuela: Economy and Trade

Venezuela holds the world's largest proven oil reserves, and petroleum has dominated its economy for nearly a century, historically accounting for the vast majority of export revenue and a significant share of government income. State-owned Petróleos de Venezuela, S.A. (PDVSA) controls the country's oil production, though output has declined dramatically since the mid-2010s due to underinvestment, mismanagement, and international sanctions.

Venezuela's overreliance on oil left it acutely exposed when global prices collapsed in 2014, triggering a severe economic crisis marked by hyperinflation, currency collapse, and one of the largest peacetime economic contractions on record. The government has since implemented a degree of de facto dollarization and eased some currency controls, which helped stabilize prices somewhat, though poverty and inequality remain widespread.

Beyond oil, Venezuela possesses substantial reserves of gold, iron ore, and other minerals, along with agricultural potential in cattle ranching, coffee, and cacao production, though these sectors remain underdeveloped relative to their potential. U.S. and international sanctions targeting the oil sector and government officials have restricted Venezuela's access to global financial markets, while informal trade with neighboring Colombia and Brazil, along with growing economic ties to China and Russia, have become increasingly important to the country's external economic relations.