The rape of Venezuela
Ricardo Hausmann
CAMBRIDGE — Shortly after the capture of Venezuelan President Nicolás Maduro, US President Donald Trump praised the country’s new rulers. Delcy Rodríguez, Maduro’s vice president who assumed power after his arrest and transfer to the United States, was “doing a great job,” Trump said, adding that “oil is starting to flow, and large amounts of money, unseen for many years, will soon be greatly helping the people of Venezuela.”
Judging by Trump’s pronouncements, Venezuela ought to be booming. And by Trump’s favorite metric, it is: oil production has increased, albeit modestly, from 908,000 barrels per day in late 2025 to 1.03 million in April. With the US effectively overseeing the country’s oil revenues, Venezuelan crude—once sold at steep discounts under American sanctions—is now priced much closer to the unusually high international benchmarks, courtesy of the Iran war. In theory, Venezuela should be awash in dollars, but is it?
The macroeconomic data tell a radically different story than the triumphalist narrative coming out of Caracas and Washington. Since Maduro’s removal, the official exchange rate has depreciated by more than 70%. Over the same period, the parallel-market price of the dollar has climbed from 585 bolívars to more than 730—a 32 percent premium over the official rate.
That is not what an oil boom looks like. When countries experience a surge in export revenues, foreign exchange pours in, and currencies tend to stabilize or appreciate. Venezuela is moving in the opposite direction: its currency is rapidly depreciating, inflation is accelerating, economic activity is weakening, and dollars are becoming scarce.
Where are Venezuela’s petrodollars? Outside Trump’s and Rodríguez’s inner circles, no one knows. And neither administration have cared to share that basic information.
This opacity has become the defining feature of Venezuela’s new political economy. The country’s oil revenues are now flowing into accounts managed by the US Treasury at the direction of Secretary of State Marco Rubio, with virtually no public accounting of the sums involved or how these funds have been used.
The sole exception came in February, when congressional pressure forced Rubio to disclose the transfer of $500 million in oil revenues to Venezuela. But that amount represents only a fraction of what the country’s oil exports should have generated. Since then, no additional figures have been released.
Operational control of Venezuela’s oil sector appears to be concentrated within the White House, with Trump’s newly established National Energy Dominance Council playing a central role. The name alone makes the administration’s priorities abundantly clear: Venezuela is not viewed as a democratic reconstruction project, but as a strategic hydrocarbon asset in the service of American power.
In political systems organized around rents, opacity is a feature, not a bug. For example, Venezuela’s new hydrocarbons and mining laws—reportedly drafted with heavy US involvement and swiftly approved by Venezuela’s National Assembly—grant the government unprecedented discretion over contract terms. Competitive bidding has given way to individually negotiated deals with minimal oversight and disclosure.
Secrecy reshapes incentives. Transparent systems constrain discretion, while opaque ones enable political insiders and favored intermediaries to capture rents. Trump associates are already rumored to have secured favorable production-sharing arrangements. Whether every rumor is true is almost beside the point, since opacity makes verification impossible.
The same logic appears to be driving Venezuela’s looming debt restructuring. Sovereign-debt renegotiations typically begin with the International Monetary Fund conducting a sustainability analysis to determine how much debt a country can realistically service while restoring growth and stability. That analysis establishes a sustainable repayment path and gives governments leverage in negotiations with creditors.
Vulture funds, now among Venezuela’s largest creditors, oppose that process because it often entails deeper haircuts and stricter oversight. They prefer a restructuring outside the IMF framework—an approach that appears to be gaining traction, as Trump officials favor settling with bondholders before multilateral institutions. Breaking with the traditional principle of preferred-creditor treatment, this would shift leverage toward private actors eager to maximize short-term returns, even at the risk of saddling Venezuela with an unsustainable debt burden.
The clearest indication of the Trump administration’s priorities is what no longer figures prominently in official discourse. America’s Venezuela policy was once framed around democratic elections, constitutional order, and human rights. Today, there is little pressure to establish an electoral timetable, appoint an independent electoral council, or reopen the voter registry to millions of Venezuelans abroad and younger people at home. Nor is there much effort to ensure the safe return of exiled opposition leader and Nobel Peace Prize laureate María Corina Machado. The US has effectively traded political and civil liberties for oil access.
Meanwhile, the regime’s repression shows no sign of abating. According to Foro Penal, a human-rights group that assists victims of arbitrary detention and their families, 473 political prisoners remain behind bars. Since Maduro’s capture on January 3, more than 80 people have reportedly been detained for political reasons.
The case of Víctor Hugo Quero Navas is particularly revealing. Arrested in January 2025, his family made repeated attempts to locate him, only to be informed last month that he had died last July while in custody. No explanation has been provided, and no one has been prosecuted.
This helps explain Venezuelans’ growing unease. Many fear that the country is drifting toward a new equilibrium in which elections, institutional reconstruction, and democratic reform are indefinitely deferred because too many powerful actors benefit from the status quo.
For Venezuela’s ruling elites, opacity guarantees survival; for their American counterparts, it creates business opportunities. The result is a striking convergence of interests: Venezuelan kleptocrats gain a political lifeline and international protection, while well-connected actors in the US secure privileged access to oil assets and lucrative financial arrangements.
While Trump acolytes and Maduro loyalists enrich themselves, the bolívar is collapsing, prices are rising, and ordinary Venezuelans are forced to watch as both groups carve up their country. Kleptocrats no longer need to isolate themselves to survive. Allying with other kleptocrats, it turns out, is far more profitable. Kleptocrats of the world, unite!
Ricardo Hausmann, a former minister of planning of Venezuela and former chief economist at the Inter-American Development Bank, is a professor at Harvard Kennedy School and Director of the Harvard Growth Lab. This article was distributed by Project Syndicate.