The Trump administration has cited Venezuela’s treatment of U.S. oil companies as a justification for the removal of former dictator Nicolas Maduro.
President Donald Trump said after Maduro’s capture that “Venezuela unilaterally seized and sold American oil, American assets and American platforms, costing us billions and billions of dollars.”
American oil companies have claimed that Venezuela expropriated their property over the years. The Venezuelan government’s mismanagement of the industry has reduced it to a shadow of what it once was.
Here’s what to know about the history of the U.S. oil industry in Venezuela.
The rise of the industry
During World War II, the Venezuelan government enacted legislation governing drilling rights in the country, known as the 1943 Hydrocarbons Law. The legislation, drafted in part to meet the desires of the U.S. State Department, paved the way for foreign companies to drill in Venezuela and support the war effort, but it also required foreign firms to hand over half of their profits to the government.
Oil production grew fivefold in the next 15 years.
Venezuela was one of the founding members of the Organization of the Petroleum Exporting Countries in 1960.
1970s nationalization
By 1970, Venezuela was producing 3.7 million barrels of oil per day, making it a top producer globally.
In 1976, though, President Carlos Andrés Pérez nationalized the oil industry and created the state company known as PDVSA. Private companies were essentially reduced to a service role, and oil production declined by half by 1988. U.S. firms were eventually compensated $1 billion for the expropriation.
The hardship created by the decline of the oil industry and falling revenues played a role in the rise to power of the socialist Hugo Chávez.
The 2007 expropriations under Chávez
The government worked to liberalize the petroleum sector in the 1990s, and U.S. firms, including Chevron, Exxon, and Conoco, either controlled oil fields or had joint ventures with PDVSA.
In 2007, however, Chávez implemented a new nationalization of the oil industry, requiring the joint ventures to renegotiate contracts to give PDVSA a 60% minimum share.
In response, Exxon and Conoco stopped working in Venezuela. They took the Venezuelan government to arbitration and were awarded billions of dollars. The government, though, stopped making payments after the imposition of U.S. sanctions on the oil sector.
Asked in November 2025 about operating in Venezuela, Exxon Mobil CEO Darren Woods said, “We’ve been expropriated from Venezuela two different times. We have our history there.”
Trump 1.0 oil sanctions and Biden’s weakened stance
During his first administration, Trump imposed sweeping sanctions on Venezuela and its energy sector to pressure Maduro to step down. Then-national security adviser John Bolton said the strict sanctions would result in $11 billion in export losses for the country in just one year.
Former President Joe Biden, however, moved to soften these sanctions in 2023 in an attempt to offer relief for high prices amid Russia’s invasion of Ukraine.
The move, which drew fierce criticism from Republicans, was reversed just months later. The Biden administration allowed temporary sanctions relief to expire in early 2024, claiming Maduro’s government failed to live up to its commitments to hold free and fair elections.
The Biden administration also made a concession agreement in 2022, granting Chevron a production and sales license, allowing the major corporation to operate in the country despite the sanctions.
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Since that agreement, Chevron has been the only U.S. oil producer in Venezuela, producing around 200,000 barrels per day.
Today, Venezuela has estimated oil reserves of 300 billion barrels, the largest in the world. It extracts fewer than a million barrels of oil per day, though, less than one-tenth of the top producers in the world.
