BY: Shatha Kalel
Venezuela’s economy has historically depended almost entirely on oil, which for decades has been the main source of foreign currency and government revenue. This deep dependence led the state to finance wages, subsidies, and public services through oil revenues, creating an economic model that is inherently fragile. When oil prices rise, spending capacity expands, but when prices fall, imbalances in the trade balance quickly emerge, and pressure intensifies on imports, prices, and the labor market.
Since 2014, the Venezuelan economy has entered a profound and unprecedented collapse. Production declined sharply, inflation reached record levels, and severe shortages of basic goods and medicines appeared. Most analyses agree that this collapse was not caused by a single factor, but rather by the interaction of several causes, most notably the fall in global oil prices, declining efficiency of the national oil company due to weak investment and poor management, ineffective economic policies, widespread corruption, and restricted access to external financing.
Oil remains the central pillar of Venezuela, not only as an export commodity but as a decisive element in the structure of the economy and the state. It is the primary source of dollars needed to import food, medicine, and industrial inputs, the main foundation for financing public spending, and a powerful geopolitical tool shaping Venezuela’s relations with major powers and the impact of international sanctions. As a result, any external pressure on oil flows or financing quickly turns into direct economic pressure inside the country.
In this context, it becomes clear why US President Donald Trump focused on Venezuela’s economy. The attack was not merely a passing political stance, but part of a multi-level approach combining political objectives, pressure through sanctions, and the oil dimension linked to energy markets and geopolitics. On one hand, US policy used elections, governance, and human rights as justifications for pressure, but recent developments, including events in January 2026, showed that some actions in practice weakened the opposition and left the ruling party in a stronger position. This made the pressure appear as a tool to produce specific political outcomes, even if controversial domestically.
On the other hand, sanctions served as a means to control what can be described as the “oxygen” of the Venezuelan economy by restricting access to the international banking system, obstructing oil sales, shipping, and insurance, and limiting transactions through dollar-based channels. Any tightening or easing of these sanctions is immediately reflected in actual oil revenues and the state’s capacity to import.
In the most recent phase, the oil dimension has become even clearer, with reports pointing to attempts to reorganize oil sales routes and reduce the benefits received by certain actors in ways that serve US priorities related to energy and influence. This is no longer just political pressure, but an effort to shape who effectively controls oil revenues and supply chains.
Economically, whether the objective is political, oil-related, or a mix of both, the outcomes for Venezuela are largely the same: heightened uncertainty, weakened investment and planning, sharp volatility in oil revenues affecting public spending and the exchange rate, potential disruptions in shipping and payments, and increased social pressure if shocks translate into shortages of goods, services, and jobs.
In conclusion, Trump focused his attack on Venezuela’s economy because oil represents the state’s primary source of power and financing. Controlling or restricting oil revenues remains the fastest and most effective way to exert political and geopolitical influence within Venezuela and across its regional environment.
Economic Studies Unit – North America Office
Center for Linkage Studies and Strategic Research