Venezuela’s legislature approved oil privatization following U.S. intervention, reflecting President Trump’s push to remake the country’s energy sector.
Venezuela’s legislature on Thursday approved sweeping changes to the country’s oil laws, opening the industry to privatization in a dramatic break from the socialist doctrine that has governed the nation’s economy for more than two decades and underscoring the far‑reaching consequences of U.
S. President Donald Trump’s intervention in the oil‑rich country. The vote by the National Assembly comes less than a month after U.S. forces seized then‑President Nicolás Maduro in a military operation in Caracas and days after Trump said his administration would take control of Venezuela’s oil exports and seek to revive production by attracting foreign investment. The bill now awaits the signature of acting President Delcy Rodríguez, who proposed the reforms shortly after Trump outlined his plans. Workers of Venezuela's state-owned PDVSA oil company rally to back an oil reform bill proposed by acting President Delcy Rodriguez to loosen state control and open the industry to private and foreign investment in Caracas, Venezuela, Thursday, January 29, 2026. Break With Chávez‑Era Oil Nationalism The legislation reverses a central pillar of the late President Hugo Chávez’s socialist revolution, which placed Venezuela’s vast oil reserves firmly under state control and made the national oil company, Petróleos de Venezuela SA, or PDVSA, the dominant player in the sector. Under the revised law, private companies would be allowed to control the production and sale of oil and settle disputes through independent arbitration rather than Venezuelan courts, which are widely viewed by investors as politicized. The overhaul marks the most significant shift in energy policy since Chávez tightened state control over oil projects two decades ago. Trump’s Oil Strategy Looms Over Reform While Venezuelan officials insist the changes are designed to rescue a collapsed economy, Trump’s fingerprints are unmistakable. The Republican president has repeatedly said the United States would “run” Venezuela’s oil industry during a transition period and use export revenues to stabilize the country and compensate for damages Washington says were caused under Maduro’s rule. The reforms are widely seen as aimed at reassuring major U.S. oil companies that remain wary of returning to Venezuela after losing billions of dollars in expropriations under Chávez and Maduro. Companies such as ExxonMobil and ConocoPhillips are still pursuing arbitration awards stemming from nationalizations in the 2000s. Incentives for Foreign Investors The revised law would cap royalties at 30% while giving the executive branch flexibility to adjust tax rates on a project‑by‑project basis, depending on investment needs and competitiveness. It also eliminates a requirement that disputes be resolved solely in Venezuelan courts — a long‑standing concern for foreign investors seeking legal protections against future expropriation. Ruling‑party lawmaker Orlando Camacho, who heads the National Assembly’s oil committee, said the reforms “will change the country’s economy,” arguing that decades of rigid state control had left oil wealth stranded underground. Opposition Seeks Transparency Guarantees Opposition lawmakers backed opening the oil sector but warned that privatization alone would not end corruption or mismanagement. Antonio Ecarri, an opposition legislator, urged the assembly to include transparency measures, such as a public website detailing contracts, revenues and expenditures. “Let the light shine on in the oil industry,” Ecarri said, warning that a lack of oversight had long fueled graft and undermined public trust. Foreign investors, he added, view transparency and judicial guarantees as essential conditions for returning to Venezuela. View of the Punta Cardon refinery from La Barra beach. Workers Celebrate, Critics Warn After the vote, oil workers wearing red jumpsuits and hard hats celebrated inside the legislative palace, waving Venezuelan flags before joining lawmakers in a demonstration with ruling‑party supporters. For many, the reforms represent a chance to revive an industry that once financed generous social programs but has since collapsed. At its peak in the early 2000s, a surge in global oil prices turned PDVSA into the backbone of Venezuela’s economy. That system unraveled as prices fell and mismanagement mounted, first under Chávez and then Maduro, contributing to a historic economic crisis that drove more than 7 million Venezuelans to flee the country since 2014. U.S. sanctions imposed by successive administrations further crippled production. A New Oil Order Takes Shape Whether the reforms deliver the promised revival remains uncertain. Much depends on Rodríguez’s willingness to follow through, the durability of U.S. backing and the readiness of foreign companies to return to a country still grappling with political instability. What is clear is that Trump’s intervention has forced a fundamental reordering of Venezuela’s oil policy, dismantling one of Latin America’s most enduring experiments in resource nationalism and tying the future of the world’s largest proven crude reserves more closely than ever to U.S. geopolitical strategy. This article includes reporting by the Associated Press.
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