History · Venezuela

Venezuela: The Oil State That Broke Down

The birthplace of Simón Bolívar and, for most of the 20th century, one of Latin America's richest and steadiest democracies — undone by dependence on a single commodity, and since 2013 the scene of an economic collapse and a mass exodus with few peacetime parallels

By Worldlore Editorial · 30 September 2026

The lights of Caracas filling a long valley between dark mountain ridges at night
Caracas, the capital, in its narrow valley below the Ávila range. Venezuela is one of the most urbanised countries in Latin America. (Wilfredor / Wikimedia Commons · CC0)

A rich country in collapse

Venezuela sits on the northern coast of South America, with about 32 million people, the Andes in the west, the Orinoco basin and the Guiana highlands in the south, and — beneath it all — the largest proven oil reserves in the world. For most of the 20th century that made it wealthy and, from 1958, an unusually stable democracy in a region of coups. Since 2013 it has undergone one of the deepest economic contractions ever recorded outside war, and more than a fifth of its population has left. This account outlines the history and attributes contested points, especially about the recent political crisis.

A short history

  1. pre-1498

    Indigenous peoples

    The Kalina (Caribs) and many other groups; Columbus reaches the coast in 1498.

  2. 1520s–1810

    Spanish rule

    A cacao colony, from 1777 the Captaincy General of Venezuela.

  3. 1811–1823

    The independence war

    Simón Bolívar leads the fight; Venezuela joins Gran Colombia.

  4. 1830

    Separation

    Venezuela leaves Gran Colombia; a century of caudillo rule follows.

  5. 1922

    The oil boom

    A gusher at Barroso No. 2 marks the start of the petroleum era.

  6. 1935–1958

    Transition

    The end of long dictatorships; a democratic opening, reversed, then restored.

  7. 1958

    Punto Fijo

    A pact founds a stable two-party democracy.

  8. 1989

    The Caracazo

    Riots against austerity are crushed with hundreds of deaths.

  9. 1999

    Chávez

    Hugo Chávez is elected and launches the "Bolivarian revolution".

  10. 2013–

    The crisis

    Chávez dies; under Nicolás Maduro the economy and politics break down.

  11. 2026

    Intervention and earthquakes

    US forces capture Maduro; Delcy Rodríguez becomes acting president; earthquakes devastate the north.

Conquest, and Bolívar

The coast Columbus reached in 1498 became a minor Spanish colony, valued for pearls, cacao and its position, and worked increasingly by enslaved Africans on the plantations. Caracas-born Simón Bolívar became the central figure of Spanish America's independence: after years of defeats, his forces won at Carabobo in 1821 and went on to liberate present-day Colombia, Ecuador, Peru and Bolivia. Venezuela was part of Bolívar's federation of Gran Colombia until it broke away in 1830. The 19th century was then dominated by caudillos — strongmen such as Páez, Guzmán Blanco and, into the 20th century, Juan Vicente Gómez, who ruled from 1908 to 1935.

A full-length portrait of Simón Bolívar in military uniform with a red sash, standing with a sword
Simón Bolívar, 'El Libertador', born in Caracas in 1783. His campaigns freed six present-day countries from Spain; the state's official name since 1999 is the Bolivarian Republic of Venezuela. (Arturo Michelena / Wikimedia Commons)

The oil century

A blowout at the Barroso No. 2 well near Lake Maracaibo in 1922 announced Venezuela's future. Within a decade it was the world's leading oil exporter, and petroleum revenue — flowing to whoever held the state — reshaped everything: agriculture withered, the population moved to the cities, and governments learned to buy stability. After Gómez's death and a further military spell, a 1958 uprising ended dictatorship for good, and the main parties signed the Punto Fijo pact, sharing power and patronage in a stable, oil-funded two-party democracy that lasted four decades — long enough that Venezuela was cited as a regional success story.

Hugo Chávez in a dark suit and red tie, gesturing while speaking, 2010
Hugo Chávez, president 1999–2013. A former army officer who had led a failed 1992 coup, he won power at the ballot box on a platform against the Punto Fijo elite and used a decade of high oil prices to fund social programmes. (Government of Russia / Wikimedia Commons)

The Bolivarian revolution

The oil-price collapse of the 1980s ended the good years. An austerity package in 1989 set off the "Caracazo" riots, put down by the army with hundreds killed. A young lieutenant colonel, Hugo Chávez, led a failed coup in 1992, was jailed, released, and in 1998 won the presidency by a wide margin. He rewrote the constitution, renamed the country the Bolivarian Republic, survived a short-lived 2002 coup and a 2002–03 oil-industry strike, took control of the state oil company PDVSA, and — as oil prices soared through the 2000s — poured money into health, literacy and food "missions" that cut poverty for a time, while also concentrating power, packing the courts, and squeezing opposition media. His supporters credit him with redistributing the country's oil wealth to the poor; his critics say he dismantled democratic checks and hollowed out the productive economy.

The crisis under Maduro

Chávez died of cancer in 2013 and was narrowly succeeded by Nicolás Maduro. Oil prices fell in 2014, exposing years of under-investment, borrowing and mismanagement. The economy went into free fall: GDP shrank by around three-quarters, hyperinflation reached close to a million per cent a year by the IMF's estimate, and shortages of food and medicine became severe. More than 7.9 million Venezuelans — over a fifth of the population — have emigrated, mostly to Colombia and other neighbours, one of the largest displacement crises in the world. The opposition-led National Assembly elected in 2015 was stripped of power; a 2017 constituent assembly and disputed 2018 and 2024 presidential votes kept Maduro in office. The opposition, and dozens of governments, say the 2024 election was stolen from Edmundo González and María Corina Machado; the government insists Maduro won, and has jailed or exiled opponents and cracked down on post-election protests. Venezuela's government describes the crisis as the product of US sanctions and an "economic war"; many economists attribute the collapse mainly to domestic policy, with sanctions worsening it after 2017.

On 3 January 2026 United States forces struck targets across northern Venezuela and captured Maduro and his wife, Cilia Flores, who were flown to New York to face drug-trafficking charges, to which they pleaded not guilty. Washington called it a law-enforcement action; the Venezuelan government called it a kidnapping, and UN officials and international-law experts said it breached the UN Charter. The government itself stayed in place, with Vice President Delcy Rodríguez sworn in as acting president on 5 January. On 24 June 2026 two earthquakes, of magnitude 7.2 and 7.5, struck northern Venezuela, the strongest since 1900; by August more than 6,500 deaths had been officially confirmed, with La Guaira state worst hit.

What Venezuela carries

Venezuela was the launching point of South America's independence and, for a large part of the 20th century, one of its richest and most democratic countries — and almost all of that rested on oil. The petroleum that funded the Punto Fijo democracy and the Bolivarian missions also crowded out other industry and taught every government to rule by distributing rents. When the price fell and the wells were run down, there was little else holding the economy up, and the political system broke with it.

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