Oil-rich, cash-poor: Inside Venezuela's resource paradox

Report by Theresia Rahme, English adaptation by Yasmine Jaroudi

Venezuela sits atop some of the world's largest natural resource reserves, with wealth estimated in the trillions of dollars, yet much of its population continues to live in deep poverty, highlighting a stark contradiction at the heart of the country's economic crisis.

Despite holding the largest proven oil reserves globally—around 20% of the world's total—Venezuela's actual oil production remains sharply constrained. Years of U.S. sanctions, combined with severe internal economic and institutional problems, have reduced output to less than 1 million barrels per day, roughly 0.8% of global production.

Most of Venezuela's oil exports are currently directed toward China. 

However, Venezuelan crude accounts for only a small fraction of China's overall oil imports, which are dominated by supplies from countries such as Russia, Saudi Arabia, Malaysia, and Iraq.

The country's vast oil wealth has not shielded it from economic collapse. Inflation reached about 190%, while poverty levels exceeded 91% in 2023, underscoring the depth of Venezuela's social and financial breakdown.

Even beyond oil, Venezuela possesses enormous untapped resources. It holds an estimated 200 trillion cubic feet of natural gas, accounting for roughly 73% of South America's total gas reserves, much of which remains undeveloped.

The country is also rich in minerals. Iron ore reserves are estimated at around 4 billion tons, with a value approaching $600 billion. Venezuela is believed to hold about 8,000 tons of gold, in addition to significant reserves of copper and phosphate. It also has nearly 500 million tons of coal, making it the largest coal reserve holder in South America.

With Washington moving to tighten its grip over aspects of Venezuela's resource sector, questions are mounting about how the country's economy may change in the coming period and whether Venezuelans themselves will finally be able to benefit from the vast natural wealth beneath their soil, and how that might happen.