Oil and Gas Diplomacy in Venezuela and Its Impact on the Country's Foreign Policy

Zamani M

Published on: 2025-04-25

Abstract

Venezuela, possessing one of the world's largest proven oil reserves, has consistently placed oil and gas at the core of its foreign policy strategies. From the nationalization of the oil industry in the 1970s to the Chavez era and beyond, energy diplomacy has served as a key tool for advancing national interests, expanding regional influence, and shaping international relations. This article, using an analytical-descriptive approach, explores the various dimensions of Venezuela’s oil and gas diplomacy and its impact on the country’s foreign policy orientation, priorities, and transformations. To begin with, the article reviews the historical background of Venezuela’s oil policy. From the establishment of the state-owned company PDVSA as the main governmental arm in energy management to repeated attempts to leverage oil geopolitically, the centrality of this resource in shaping Venezuela’s external relations is evident. The presidency of Hugo Chavez marked a turning point, with an “oil-for-ideology” strategy implemented through alliances with anti-American and leftist governments in Latin America, Africa, and even Asia. Preferential oil exports or outright aid to countries such as Cuba, Nicaragua, and Bolivia were part of this approach, aimed at strengthening political and regional alliances. Next, the paper analyzes how energy diplomacy shaped Venezuela’s foreign policy in the post-Chavez era. The sharp decline in oil prices in the mid-2010s, the intensification of U.S. economic sanctions, and a structural crisis in production and exports significantly reduced the country's foreign policy maneuverability. Nevertheless, the Maduro government has sought alternative paths by strengthening ties with actors like Russia, China, and Iran to sustain its energy diplomacy and counter international isolation. These partnerships often extend beyond energy into finance, military, and technological cooperation. Against this backdrop, the central research question is: how has oil and gas diplomacy shaped Venezuela’s foreign policy, and what opportunities and constraints has it faced? The findings suggest that while Venezuela’s energy diplomacy has theoretical geopolitical and economic potential, it has been consistently undermined by internal factors such as mismanagement, corruption, and institutional weaknesses, as well as external variables such as sanctions and fluctuations in global oil markets. Moreover, the paper reveals that Venezuela’s foreign policy, at various stages, has sought to reinforce a multipolar international order and resist U.S. hegemony by relying on oil revenues. However, due to declining competitive advantage and diminished foreign investment, the country has become increasingly vulnerable to external pressure. In this context, oil has functioned as a diplomatic weapon of resistance, though its effectiveness has been highly contingent on economic conditions, technological capacity, and the international political environment.

In conclusion, the article argues that although Venezuela’s oil and gas diplomacy has achieved some short-term political and ideological goals, it has also led to a fragile foreign policy posture in the long run due to lack of economic diversification and structural reforms in the energy sector. The future of this diplomatic approach will depend on Venezuela’s ability to rebuild its oil infrastructure, engage effectively with global partners, and reform its governance model away from rentier dependency.