For some, the crisis in Venezuela is all about the endemic corruption of Nicolás Maduro, continuing the broken legacy of Chavez’s ideological experiment in socialism under the mounting insidious influence of Putin. For others, it’s all about the ongoing counter-democratic meddling of the United States, which has for years wanted to bring Venezuela — with its huge oil reserves — back into the orbit of American power, and is now interfering again to undermine a democratically elected leader in Latin America.
Neither side truly understands the real driving force behind the collapse of Venezuela: we have moved into the twilight of the Age of Oil.
So how does a country like Venezuela with the largest reserves of crude oil in the world end up incapable of developing them? While various elements of socialism, corruption and neoliberal capitalism are all implicated in various ways, what no one’s talking about — especially the global oil industry — is that over the last decade, we’ve shifted into a new era. The world has moved from largely extracting cheap, easy crude, to becoming increasingly dependent on unconventional forms of oil and gas that are much more difficult and expensive to produce.
Oil isn’t running out, in fact, it’s everywhere — we’ve more than enough to fry the planet. But as the easy, cheap stuff has plateaued, production costs have soared. And as a consequence the most expensive oil to produce has become increasingly unprofitable.
In a country like Venezuela, emerging from a history of US interference, plagued by internal economic mismanagement, combined with external intensifying pressure from US sanctions, this decline in profitability became fatal.
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