The Energy Transition in Venezuela

Venezuela sits atop some of the world’s largest reserves of oil, gas, and mineral resources, yet remains economically fragile and politically isolated. As the global energy system shifts toward decarbonisation, Venezuela faces a profound paradox: endowed with critical minerals such as aluminium, phosphorus, sulfur, and iron—as well as substantial gold and lead reserves, it holds the raw materials increasingly essential to clean energy technologies. However, the country’s deteriorating infrastructure, fragmented institutions, and entrenched political crisis have severely constrained its ability to monetise these resources responsibly or strategically. Historically dependent on petroleum exports through its state oil company PDVSA, Venezuela’s power generation remains uneven and unreliable, despite considerable hydropower capacity. Chronic underinvestment, mismanagement, and international sanctions have led to widespread energy insecurity, with many areas relying on diesel and gasoline generators to meet basic needs. Meanwhile, industrial-scale mining has expanded, particularly in the resource-rich Orinoco Mining Arc, where informal and illicit operations often coexist with state-backed extraction, generating serious environmental, human rights, and governance concerns. Venezuela’s participation in global institutions like the United Nations, G77, OPEC, and the Arab League shows its historical role in energy diplomacy. Yet in practice, its influence has waned amid international sanctions, capital flight, and a shifting global energy order. As critical minerals take centre stage, Venezuela’s potential remains largely unrealised, trapped between vast geological promise and profound political constraints. Any future path toward energy transition or sustainable mineral development will depend not only on market dynamics but also on a resolution of the country’s domestic crisis, regulatory reform, and renewed international engagement.