How Trump rewrote Chavismo’s playbook

VENEZUELA

Venezuela’s socialist regime survives – but the nationalism that defined it may soon be a thing of the past

IN the most dramatic retreat from Chavismo since Hugo Chávez seized foreign oil producers in 2007, a proposed overhaul of Venezuela’s hydrocarbons law would end nearly two decades of state control over crude production.

Reforms presented to the National Assembly by interim President Delcy Rodríguez would allow foreign companies to operate fields independently, market crude directly and settle disputes in international courts.

If adopted, the changes would reverse the principle that became the beating heart of Venezuela’s socialist experiment and mark the end of an era.

“This is a fundamental shift away from resource nationalism,” says Lewis Galvin, lead Americas analyst at Sibylline.

“It removes the one thing Chavismo insisted on above all else – that the state had to sit at the centre of every oil project.”

Yet those hoping for root-and-branch reform will be disappointed.

Despite Nicolás Maduro’s extraction, the regime remains in place, and Venezuela can still speak the language of sovereignty and socialism.

And that is the point.

Though many draw comparisons between Donald Trump and Ronald Reagan, there is clear blue water between Trumponomics and Reaganomics.

While Reagan held a free-trade stance, the world has already seen the face of Trump’s protectionism: tariffs and “America First” policies designed to shield domestic manufacturing.

And while Reagan sought a united hemisphere built on democratic values and economic freedom, Trump does not care.

Latin America’s so-called pink tide can remain intact, so long as it respects US strategic dominance.

As Galvin puts it, “Trump is seemingly willing to work with people from across the political spectrum if they supplement his interests.”

By removing Maduro from power, Trump has achieved two outcomes that directly benefit the United States.

The first is control over the valve of Venezuelan oil exports to China.

Washington says it will control Venezuela’s oil sales indefinitely after ousting the dictator of 13 years three weeks ago.

Supplies continue to flow, but no longer at the “unfair, undercut” prices at which Caracas sold crude previously.

According to US Energy Secretary Chris Wright, the US is now receiving about $45 per barrel for Venezuelan oil, compared with roughly $31 before Maduro’s removal.

With China relying on Venezuela for only around 5% of its total oil imports, turning the tap off entirely would have risked another trade war with Beijing for little strategic gain.

Raising the price of a barrel of crude, by contrast, secures a quantifiable and political win for the White House.

Venezuela, meanwhile, is also benefiting.

Rodríguez has confirmed that of an initial $500 million crude sale, $300 million went into treasury coffers in Caracas.

Plans to denationalise Venezuelan oil are even more significant.

Under Hugo Chávez and later Maduro, foreign firms could operate only through joint ventures tightly controlled by the state-owned oil company PDVSA.

Venezuela’s oil industry had been nationalised since the 1970s, but Chávez’s 2007 seizures made resistance to foreign control the ideological core of the system.

With assets expropriated and legal protections stripped away, the state’s dominance of the oil sector became the clearest expression of Chavismo itself.

What makes the current move so striking is not just its scale, but its swiftness following Maduro’s removal.

“Maduro had years to do something like this and never did,” Galvin notes.

“It is as if those around him knew something needed to change and, when Maduro went, it presented the opportunity to rethink.”

The reforms reflect a blunt recognition that the existing system had become economically unsustainable.

“By the end, it wasn’t really about socialism or anti-imperialism anymore,” Galvin says.

“It was a system that survived because the people at the top were profiting from it, even as the economy collapsed underneath them.”

They also reflect Rodríguez’s need for political cover.

Allowing foreign operators to invest, operate and repatriate profits gives the regime a chance to stabilise production, bring in dollars and ease pressure on a shattered economy.

“If the economy improves even marginally under the current leadership, it allows the regime to fight any future election from a position of strength rather than collapse,” Galvin says.

“This becomes more relevant if future elections in Venezuela do become free and democratic.
This will certainly affect the opposition’s position.”

Venezuelan opposition leader María Corina Machado’s decision to gift her Nobel Prize to Trump may have been underwritten by precisely this fear.

One test will be whether Rodríguez and her inner circle are de-sanctioned by the US in the near future.

But there is another.

While the oil laws are being rewritten, the criminal economy that sustained the regime has not been dismantled. Drug trafficking, illegal mining and patronage networks remain largely intact.

“The stated point of removing Maduro was to tackle narco-trafficking, yet nothing has been done so far to dismantle the criminality within the regime – the drug trafficking and illegal gold mining that benefited it in the past,” Galvin says.

Tentative plans to address this through a combined US-Venezuelan intelligence effort would be “a big step” if they materialise.

“It would be a really big statement if they start going after the ELN on the border with Colombia,” he says.

“But there is the concern that the ELN fights back. They are very seasoned, heavily armed and well equipped.”

“Venezuela is not out of the woods just yet.”