Venezuela Faces Economic Overhaul as US Controls Oil Revenue Following Leadership Change
Venezuela entered a state of suspended economic animation this month following the U.S. military capture of Nicolás Maduro, the country is now navigating a complex transition under strict American oversight. This shift marks a dramatic turn for the oil-rich nation, widespread dollarization has become the unofficial standard as hyperinflation continues to decimate local currency value.
Decades of Decline Spark Urgent Intervention
The roots of this crisis stretch back to the 2007 nationalization of oil assets, this policy caused severe infrastructure decay and drove foreign investment away from the region. Production collapsed from 3.5 million barrels per day in the 1990s to under one million by 2025, the fraudulent 2024 election further isolated the regime and invited intensified sanctions. These events created the conditions for the military intervention on January 3, 2026, the current landscape represents a forced pivot toward a managed interim state.
US Oversight Targets Oil Sector Reform
American officials have assumed the role of economic trustees to stabilize the region, proceeds from Venezuelan crude are now being diverted into humanitarian aid accounts rather than state coffers. This strategy aims to bypass the PDVSA infrastructure that previously funded the inner circle, new legislation is already being drafted to allow private firms to operate independently. Delcy Rodríguez currently leads the remnants of the government as acting president, she must cooperate with these economic demands while maintaining internal security control.
Inflation Crisis Widens Wealth Gap
The disconnect between wages and costs has reached critical levels, annual inflation closed 2025 at nearly 600 percent. A monthly pension is currently worth less than 40 cents USD, a single kilogram of cheese costs seven dollars. This disparity has forced 70 percent of the population into extreme poverty, most citizens now rely entirely on private-sector jobs or remittances to survive.
Investment Needs Determine Future Stability
Experts estimate the country requires 183 billion dollars in investment over the next 15 years to restore production levels, legal frameworks are being rewritten to encourage privatization. Short-term price volatility remains a significant threat to stability, the success of this transition depends on how quickly aid reaches lower-income brackets.
Failure to stabilize prices could trigger a renewed wave of mass migration, major investors remain cautious about legal risks until a definitive date for democratic elections is established.
