Explained: Everything about Venezuela. How the oil rich nation turned out to be sanctioned by US ?

On 3rd January 2026, the United States conducted a military operation in Venezuela, capturing President Nicolás Maduro and his wife from a secure location in Caracas following explosions at approximately 2:00 AM. Shortly thereafter, the US military released photographs of President Maduro in custody, and videos depicting his transfer to a military airport in New York began circulating on social media.

The operation elicited widespread international reactions. Several countries condemned the US action as a violation of Venezuela’s sovereignty, while others expressed support for the intervention. Notably, European nations responded with measured statements, highlighting a perceived inconsistency in how Western powers define and uphold sovereignty particularly when comparing reactions to Russia’s actions in Ukraine with the US intervention in Venezuela, while Europe has consistently condemned violations of territorial integrity elsewhere, it appeared to justify the US operation in this instance.

But why did US invade Venezuela? Most simply put, because Venezuela is oil rich nation and it was not responding positively to US commands. Second it was becoming direct threat to US dollar dominance as it was bypassing dollar to sell it in other countries example to Chinese in Yuan. Third it wants to keep Chinese out of South America. However it's important to understand that Venezuela is a lot weaker as compared to US in all aspects so it's not a proud thing to do this operation but rather it's show of power and arrogance of Donald Trump. Now let's understand it in detail as well as the history, economy and other factors with respect to Venezuela.

Venezuela is a country in northern South America, strategically located on the Caribbean coast and rich in natural resources, particularly oil. Before European colonization, the region was inhabited by indigenous peoples such as the Caribs and Arawaks. Spanish explorers arrived in 1498, and Venezuela remained a Spanish colony for about 300 years, with an economy based on plantations, cocoa, coffee, and the forced labor of enslaved Africans. Venezuela gained independence in the early 19th century under the leadership of Simón Bolívar, who became the symbol of Latin American liberation. In the decades following independence, the country faced political instability, frequent rule by military strongmen, and weak institutional development.

The discovery of vast oil reserves in the 1920s transformed Venezuela’s economy. By the mid-20th century, Venezuela emerged as one of Latin America’s wealthiest nations, with oil revenue funding public services, infrastructure, and social programs. Petrol was heavily subsidized, often costing far less than bottled water, and Venezuela attracted immigrants from Europe and the Middle East. However, the economy became highly dependent on oil, while other sectors such as agriculture and manufacturing were neglected. This over-reliance on a single resource made the country vulnerable to fluctuations in global oil prices, a weakness that became painfully apparent during oil price declines in the 1980s and the 2010s.

The rise of Hugo Chávez in 1999 marked a turning point in Venezuela’s political and economic trajectory. Chávez introduced “Bolivarian socialism,” emphasizing wealth redistribution, social welfare, and national sovereignty. His government nationalized key industries, including oil, electricity, and telecommunications, and launched extensive social programs known as “missions,” which provided free healthcare, education, and subsidized food to the poor. During periods of high oil prices, these programs reduced poverty and improved living standards. However, long-term mismanagement, corruption, and politicization of the state oil company PDVSA undermined productivity and investment. Experienced engineers and managers were dismissed, infrastructure deteriorated, and production declined. After Chávez’s death in 2013, Nicolás Maduro inherited an already weakened economy. Falling oil prices, continued mismanagement, and international sanctions triggered hyperinflation, severe shortages of food and medicine, and widespread poverty, forcing millions of Venezuelans to migrate abroad.

Venezuelan society is known for its warmth, expressiveness, and strong family bonds. Despite economic hardship, social life revolves around community, music, and festivals. Baseball is the country’s most popular sport, and Venezuelans are proud of their cultural achievements, including their disproportionate success in international beauty pageants. Music, dancing, and celebrations remain central to daily life, reflecting the resilience and optimism of the people. Even during crises, Venezuelans maintain a strong sense of identity and community solidarity.

Oil remains the backbone of Venezuela’s economy. The country possesses the world’s largest proven oil reserves, primarily in the Orinoco Belt. Venezuelan crude is predominantly heavy and high in sulfur, which makes it thick, difficult, and expensive to refine. Only specialized refineries, historically in the United States and India, could process it efficiently. PDVSA, once a professional and globally competitive oil company, collapsed due to political interference, diversion of revenue to social programs, mismanagement, and later sanctions. Subsidized petrol further drained public finances, encouraging waste, smuggling, and corruption. Historically, Venezuela exported oil to the United States, Europe, India, China, Cuba, and several Latin American countries through initiatives like Petrocaribe. In recent years, sanctions forced Venezuela to sell oil indirectly at discounted prices, mainly to China and a few Asian buyers, limiting revenue and economic recovery.

Venezuela’s international relations, particularly with the United States, have evolved significantly over the past century. In the early 20th century, relations were cooperative, with US companies investing heavily in Venezuelan oil. During the democratic period of 1958–1980s, relations remained friendly, with the US purchasing large quantities of crude. Tensions began in the 1990s with Hugo Chávez, whose anti-US rhetoric and socialist policies marked a shift toward confrontation. While trade continued under Chávez, relations deteriorated under Nicolás Maduro, with US sanctions, recognition of opposition leader Juan Guaidó, and diplomatic isolation. Geopolitically, Venezuela maintains strong ties with China, Russia, Iran, and Cuba, while regional relations, especially with Colombia and Guyana, remain complex due to migration, border security issues, and territorial disputes over the Essequibo region.

Venezuela’s trajectory offers several lessons for resource-rich countries. Heavy dependence on a single commodity exposes the economy to global price volatility. Strong institutions, professional management, and reinvestment in infrastructure and human capital are essential for sustainable growth. Fiscal discipline is critical; extreme subsidies and populist spending without stable revenue sources can trigger financial crises. Finally, economic diversification is necessary to create resilience beyond the resource sector. Venezuela demonstrates that oil wealth, without good governance and sound policy, can become a liability rather than a source of prosperity.

In conclusion, Venezuela is a resource-rich country whose oil wealth initially brought prosperity but ultimately contributed to economic collapse due to mismanagement, political interference, and over-reliance on oil. Its people remain resilient, culturally vibrant, and community-oriented despite severe hardship. Venezuela’s experience serves as a cautionary tale on the importance of governance, economic diversification, and institutional strength in harnessing natural resource wealth for sustainable development.

India and Venezuela: Relations

India and Venezuela have maintained friendly diplomatic relations for decades, historically centered on oil trade. Before US sanctions in 2019, Venezuelan heavy crude was a significant supply for Indian refiners like Reliance Industries and Indian Oil Corporation. Sanctions forced India to halt imports temporarily, but some crude trade resumed by 2023–24 as restrictions eased. Bilateral trade remains modest, with India exporting pharmaceuticals, machinery, and other goods, while Venezuela exports oil and minerals. Beyond energy, both countries are exploring cooperation in mining, technology, health, and agriculture. Geopolitical factors, especially US sanctions, continue to influence the relationship.

By: Ashutosh Garg (Policy, tech and international relations enthusiast)

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