Venezuela, which has become an active oil producer in the last decade, has been dealt another heavy blow with new sanctions taken during Donald Trump’s presidency in 2025. According to the decision announced by Trump on social media on March 24, countries importing oil or natural gas from Venezuela will be subject to an additional 25% customs duty on all trade they will conduct with the United States (US).[1] At the same time, the operating licenses of US-based companies such as Chevron and Global Oil Terminals and companies with roots in Spain, France, India, and Italy, in Venezuela, have been revoked. These steps are dragging the Venezuelan oil industry, which is already in a fragile balance, to an even more precarious point.
These aggressive moves by the Trump administration have increased the risk of Venezuela being almost completely isolated from international oil trade. Francisco Monaldi, one of Venezuela’s leading figures in oil and energy policies, stated that a drop in oil production of more than 100,000 barrels per day could seriously damage the world oil market.[2] Since 2013, severe declines in Venezuela’s oil production have been observed.
This decline is not only due to external interventions, but also to internal structural problems. The collapse of the Venezuelan State Oil Company (VDPŞ) in particular has been accelerated by reduced investments, maintenance deficiencies, inadequate management practices, and unsuccessful international agreements. According to statements made by the Venezuelan Transparency Organization, the fate of billions of dollars that should have entered the state coffers remains uncertain, and many former energy ministers and VDPŞ executives are either in prison or have settled abroad.[3] These adverse situations have made it difficult to restructure the sector.
This internal crisis has been further deepened by the economic and financial sanctions imposed by the US. In particular, restrictions on the VDPŞ’s material supply chain, the Venezuelan Central Bank, and other public institutions have caused the country’s economy to shrink. Compared to the early 2000s, Venezuela’s Gross Domestic Product (GDP) has fallen by a quarter, hyperinflation has reached six figures, the income-based poverty rate has climbed to 90%, and approximately 8 million people, a quarter of the country’s population, have been forced to emigrate.[4]
However, a recovery trend has been observed since 2022, when Washington allowed Chevron and some other foreign companies to operate in Venezuela with limited operations. According to the Organization of the Petroleum Exporting Countries (OPEC), the country’s daily oil production rose to 760,000 in 2023, 857,000 in 2024, and 913,000 in March 2025.
However, with Trump’s new sanctions, this fragile recovery is at risk of being abruptly interrupted. While Chevron’s withdrawal means that VDPŞ will take over the fields, an inevitable decline in production is expected. Material shortages, loss of technical support, and difficulty importing diluents could seriously disrupt production processes.
Therefore, Venezuela is heading towards a new decline in oil production and a new economic shock wave with loss of income, financial isolation, and severe contractions in energy exports. The latest sanctions move by the US is expected to strengthen Venezuela’s quest to turn to Asian markets, but it is also anticipated that this transition will not be easy.
Production bottlenecks and export barriers are leading Venezuela to different searches. Especially in Southeast Asia, at international maritime trade points such as the Strait of Malacca, oil is transferred between tankers at sea, creating uncertainty about origin. Thus, attempts are made to overcome sanctions. Venezuela has been implementing this method since 2019, presenting the oil as Malaysian to deliver it to the target countries.[5] However, this method not only increases legal risks, but also logistics costs. Profit margins are reduced due to long-distance transportation, insurance fees, and intermediaries; oil is forced to be sold at discounts of up to 30% per barrel.
Additionally, Venezuelan crude is more difficult and costly to process than lighter grades such as Brent or West Texas Intermediate (WTI). This technical difference results in the oil’s market price being around $10 lower.[6] This further limits Venezuela’s already dwindling revenue potential and makes the country more economically fragile.
The picture is also quite pessimistic in terms of economic indicators. The Venezuelan economy, which grew by 2.6% and 5% in 2023 and 2024, respectively, is a candidate for recession after these developments. It seems highly probable that a recession will occur in 2025. The fact that the bolivar has lost over 50% of its value against the dollar since the beginning of the year alone is a sign that hyperinflation will return.[7] According to Ecoanalítica data, the inflation forecast for 2025 is 189%.[8] This rate directly threatens people’s purchasing power and daily lives.
Finally, this crisis is indirectly affecting Venezuela and the US energy market. While US importers made a profit by selling oil in the domestic market to foreign countries thanks to the cheapness of Venezuelan crude oil, this balance has been disrupted. In addition, Chevron’s withdrawal directly negatively affects access to public health in small settlements such as Soledad, where social responsibility programs are implemented.
At the regional level, in an environment where Venezuela is losing its traditional export markets, neighboring countries such as Brazil and Guyana are rapidly increasing their energy production. The United States supports them as strategic partners. Brazil produces 3.4 million barrels of oil per day, while Guyana produces 650,000.[9] This development further weakens Venezuela’s place in the regional energy balance.
[1] Marquez, Humberto. “Venezuela’s Oil Trapped in Hurricane Trump’s Onslaught”, Global Issues, Inter Press Service, https://www.globalissues.org/news/2025/04/25/39702, (Date Accession: 25.04.2025).
[2] Ibid.
[3] Ibid.
[4] Ibid.
[5] Cohen, Luc, and Marianna Parraga. “Special Report: How China Got Shipments of Venezuelan Oil Despite U.S. Sanctions.” Reuters, https://www.reuters.com/article/world/special-report-how-china-got-shipments-of-venezuelan-oil-despite-us-sanctions-idUSKBN23J1N6/, (Date Accession: 27.04.2025).
[6] Marquez, Humberto, opcit.
[7] Ibid.
[8] Ruiz, Luis Alejandro. “Venezuela’s Black Market Exchange Rate Soars to Bs 95.60 per U.S. Dollar Amid Institutional Silence.” Guacamaya, https://guacamayave.com/en/venezuelas-black-market-exchange-rate-soars-to-bs-95-60-per-u-s-dollar-amid-institutional-silence/, (Date Accession: 27.04.2025).
[9] Marquez, Humberto, opcit.
