Venezuela’s Oil-Based Economy

Venezuela has an oil economy. It is the world’s fifth-largest oil exporter and its oil reserves are among the top ten in the world. Oil typically generates 80 percent of the country’s total export revenue, contributes about half of the central government’s income, and is responsible for about one-third of the country’s gross domestic product (GDP).

Venezuela has an estimated 78 billion barrels of conventional crude oil reserves and an additional estimated 235 billion barrels of unconventional extra-heavy crude oil in the Orinoco Belt region located southeast of Caracas. If development in the region can turn this extra-heavy tar-like oil into a more marketable commodity, Venezuela’s total reserves could rival those of Saudi Arabia, reports the New York Times. Yet Professor Tinker-Salas argues that production of extra-heavy crude oil is “only viable long as the price of oil remains over $50 per barrel.”
Council on Foreign Relations