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Venezuela’s Oil-Based Economy

Posted by Matt in July 1st, 2008

Venezuela’s proven oil reserves are among the top ten in the world. Oil generates about 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). Increases in world oil prices in recent years have allowed Venezuelan President Hugo Chavez to expand social program spending, bolster commercial ties with other countries, and boost his own international profile. Though Chavez has threatened to stop exporting Venezuelan oil and refined petroleum products to the United States, its biggest oil-trading partner, experts say a significant short-term shift in oil relations between Venezuela and the United States is unlikely. The medium-term outlook for state oil company PDVSA is questionable, however, and analysts draw links between PDVSA’s profitability and the political stability of the country.

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Map for Caracas, Venezuela

[Countries link to CIA Factbook. States link to Wikipedia.]


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