Venezuela: Nearly Six Months After Maduro's Ouster, It's All About Oil

Nearly Six Months After Maduro’s Ouster, It’s All About Oil VENEZUELA Venezuela The coastal city of Cumaná in eastern Venezuela once pumped out Toyota Land Cruisers and metal cans for the tuna and sardines that local fishermen caught. Today, after years of socialist rule that started with Hugo Chávez in 1999, the former economic powerhouse is a shadow of its former self. “Drinking water in Cumaná is running extremely low,” wrote the New York Times. “Daily blackouts plague the city. Wind howls through the looted remains of its once illustrious university. Scavengers sift through garbage dumps for scraps of food.” The decay in Cumaná captures the crisis now confronting Venezuela’s leader, acting President Delcy Rodríguez. Maduro’s former vice president was installed after US forces seized Maduro and his wife in January. Now, her central challenge is whether she can revive the economy by courting the US and foreign oil companies without losing the Chavista base that brought her movement to power. That is an awkward turn for Rodríguez, once a dyed-in-the-wool socialist whose movement spent years denouncing Washington. That balancing act is already testing the new government. “Rodríguez confronts an unprecedented challenge for a Venezuelan leader: She must satisfy Washington’s demands while maintaining sufficient Chavista coalition support to prevent an internal fracture or a military coup,” wrote the Atlantic Council. “Rodríguez making such an agreement with Trump would alienate the regime’s hardliners, who would view her accommodation as a betrayal. Thus, Rodríguez may be unable to guarantee the stability required for the business operations Trump wants to run in Venezuela.” Those tensions are now openly splitting the movement. Observers say that longtime loyalists are currently openly and loudly disagreeing with the Rodríguez administration and even discussing publicly rumors that an insider betrayed the government and helped the US depose Maduro, the Associated Press wrote: “They are criticizing her overtures to the US and her efforts to attract foreign investment, saying she is betraying the socialist principles and anti-imperialist rhetoric that defined Chavismo for more than two decades.” For Chavistas who supported alliances with China, Russia and Iran as a counterweight to Washington, Rodríguez’s cooperation with the US looks like a sharp break from the movement’s anti-US posture. And her decision to send former officials to the US to face prosecution and approve American military exercises in Venezuela has made that shift even harder for Chavista loyalists to accept. But Rodríguez might be wise not to fight the tides, analysts say. In the wake of the US actions in Venezuela and a spike in energy prices worldwide due to the wars in Ukraine and the Persian Gulf, oil companies are taking another look at Venezuela’s oil riches. Washington has also eased sanctions on Venezuela’s energy sector, allowing major oil companies to resume operations and other firms to negotiate new energy contracts. The move followed changes to Venezuela’s oil law giving foreign producers more autonomy, though dealings with Russian, Iranian or Chinese entities remain barred. Companies could spend billions investing in the country’s infrastructure, a windfall that could turn the Venezuelan economy around. While ConocoPhillips CEO Ryan Lance told Bloomberg News that Venezuela still has “a long way to go” before its state-heavy economy can attract major investment, ExxonMobil CEO Darren Woods has softened his bleak view of Venezuela as a place for investors. “I feel positive about what’s happening, the opportunity there,” he told investors last month, according to Quartz. “(There is) more work to do, but I think we’ll be uniquely positioned and play an important role in bringing those barrels to market.” Energy giants like ExxonMobil are now negotiating with Rodríguez’s government to return, but they are concerned about a revival of anti-corporate policies, such as when Chávez nationalized parts of the Venezuelan oil industry in 2007. The Venezuelan people, meanwhile, are waiting to see what happens. Life is still a struggle for most people who are grappling with inflation rates as high as 618 percent. Many are also wondering about when elections will be held. Regime officials, analysts say, prefer to work on the economy first, believing that if the situation improves, they might have a chance in elections. Still, they fear prosecution by the opposition should it win, making elections an unappealing prospect. Meanwhile, since the Maduro ouster, Rodríguez has ousted some officials and replaced them with technocrats, but most of her administration is still made up of Maduro insiders. She has released about 700 political prisoners. Almost 500, however, remain in jail. Still, the regime is tolerating protests for the first time: Hundreds of demonstrations have been held since January. A recent poll showed that while 58 percent said life had not improved over the past six months, 85 percent expected things to get better within a year. “Clearly, Venezuelans have experienced what today would be called a ‘vibe shift,’” World Politics Review wrote. “But much of the reality on the ground is remarkably unchanged, considering that the US mounted what was essentially a successful regime-decapitation operation.”