Given that Venezuela has the most oil reserves in the world, why isn’t the country as rich as Saudi Arabia? Also, why have so many of the major oil companies stopped operating there?
In: 8
TL;DR – politics
Saudi Arabia has an oppressive government but they recognize that oil is their life blood and so have played nice with world governments for most of the last century. They agreed to sell oil exclusively in US dollars starting in 1945 (see [petrodollar](https://www.thebalance.com/what-is-a-petrodollar-3306358)). In exchange the US government provided them with technical expertise and military support. Due to the influx of money and western support they are the most stable and influential country in the region.
Venezuela on the other hand has had constant political turmoil and has never been able to utilize the full potential of their reserves. A combination of political corruption, revolutions, coups, sanctions and lots more have greatly hampered the country’s economic growth in all areas, and oil production remains a massive casualty. Countries and companies want stability in exchange for large investments, and Venezuela can simply not provide it.
Given that Venezuela has the most oil reserves in the world, why isn’t the country as rich as Saudi Arabia? Also, why have so many of the major oil companies stopped operating there?
In: 8
TL;DR – politics
Saudi Arabia has an oppressive government but they recognize that oil is their life blood and so have played nice with world governments for most of the last century. They agreed to sell oil exclusively in US dollars starting in 1945 (see [petrodollar](https://www.thebalance.com/what-is-a-petrodollar-3306358)). In exchange the US government provided them with technical expertise and military support. Due to the influx of money and western support they are the most stable and influential country in the region.
Venezuela on the other hand has had constant political turmoil and has never been able to utilize the full potential of their reserves. A combination of political corruption, revolutions, coups, sanctions and lots more have greatly hampered the country’s economic growth in all areas, and oil production remains a massive casualty. Countries and companies want stability in exchange for large investments, and Venezuela can simply not provide it.
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