Venezuela has inherited the largest volumes of oil and natural gas in the world, as the world’s 4th most prolific supplier of crude oil to the USA. Also, Venezuela outstrips the several contributors of the Organisation of Petroleum Exporting Countries (OPEC). As of 2014, boasting of its almost 300 billion barrels of oil reserves (298 billion), Venezuela has even topped Saudi Arabia in oil reserves. In addition to petroleum, Venezuela stands prominent among world natural gas producers. In 2014, Venezuela ranked second among American countries with a production tally of 713 billion cubic feet of dry natural gas.
Even with this copious quantity of natural gas, Venezuela still has to import supplementary natural gas from Colombia to fully exploit its mature oil fields. Mature oil fields mandate not only, prodigiously high volumes of natural gas to unearth, but they also require higher investment. More recently, Venezuela has diverted its trade from US orientation to China and India.
As a petro-state, 94% of Venezuela’s revenue derives from crude oil forming the bedrock of its political support and foreign policy.
These endowments have propelled Venezuela as a key actor in the international oil market and the global political forum. This Venezuelan oil boom and boom have strengthened Venezuela’s economy and voice, exerting itself geopolitically in Latin American and world politics through its petrodollar diplomacy, soft social power diplomacy, and presidential diplomacy. These strategies are fused with Chavismo to mold its distinctive Chavista domestic and foreign policy. The oil emphasis in these political and Latin America integrationist plans is termed “the petrolisation of the policy environment in Venezuela.
(Massabié 2009) As a consequence, Venezuela’s foreign policy is shaped under anti-globalization, anti-U.S, anti-Western., pro-socialist, and pragmatist ideologicaltemplatese, heavily engraved by Russian and Cuban socialism, national defense doctrine, Bolivarianism, and Tri Continentalism (ina departure from the Washington Consensus)Chavez’sez activist foreign policy was contrived in an attempt to soft-balance the U.S hegemonic power. His approach strives to undermine U.S. foreign policy goals (employing the polarization strategy). Venezuela’s foreign policy views are also left-wing, anti-imperialist, and pro-social justice all grounded on dependency theory. Venezuela’s oil and foreign policy strategy is advanced as it primarily deploys both the President and Venezuelan Energy Minister in the conduct of its foreign affairs.
Its PetroCaribe, ALBA, Petrosur, Unasur, and Mercosur memberships grant isocio-politicalal leverage via its generous, preferential loan terms and oil subsidies. Venezuela has priced its oil/gasoline at US$0.01 per litre for the past 1literrs. This discounted arrangement has fostered a black market as dealers purchase Venezuelan gasoline and other petro-products and re-sell them to Brazilian and Columbian neighbors at higher rates. Venezuelan loans for Cthe aribbean and Central American countries are premised on very privileged conditions with long-term and even non-monetary (barter-like) repayment plans and reciprocal agreements.
Although Venezuela de-regulated its oil and natural gas sector in the early 1990s; in the late 1990s, under Hugo Chavez, Venezuela nationalized its petroleum and natural gas industries under PDVSA. PDVSA owns three major oil refineries in Louisiana, Texas, and Illinois. These counter-liberalization policies imposed mandatory public participation and state control on all oil projects. Even multinational oil companies must subscribe to Venezuela’s 60% minimum share and joint-venture policy. One cannot but recognize the importance of Venezuela as Caracas served as the capital of the New World Economic Order in the 1970s. Under this initiative, Latin American integration burgeoned. Venezuela’s oil-based power helped construct the Bank of the South in 2009 (an alternative to the IMF and World Bank).