Diving Deep into the Crisis in Venezuela

“We’ve just seized a tanker on the coast of Venezuela. Large tanker. Very large. Largest one ever seized, actually.”

That was Donald Trump, speaking on December 10, announcing the latest escalation in Washington’s long-running feud with Venezuela. It was vintage Trump—off-the-cuff, boastful, and ominous. But behind the theatrics was something far more serious: a renewed standoff between the United States and a country that has spent more than a decade unraveling in slow motion.

At the time of writing, at least nine U.S. naval vessels are positioned in the Caribbean, including the world’s largest warship, now within striking distance of Venezuelan waters. According to the BBC, U.S. F/A-18 Super Hornets were tracked near Maracaibo, Venezuela’s second-largest city, before circling the Gulf of Venezuela. An EA-18G Growler and another jet appeared shortly before them, all with transponders switched on only as they approached the coast.

U.S. officials told the Associated Press the flights were routine training exercises. Venezuelan President Nicolás Maduro was unconvinced. He accused Washington of attempting to destabilize his government and force him from power. Analysts echoed that interpretation. Justin Crump of the risk consultancy Sibylline told the BBC the flights were designed to apply pressure.

Which raises the obvious question: how did it come to this?

How did Venezuela—once Latin America’s richest nation—end up facing the real possibility of American military intervention? And perhaps more importantly, where does it go from here?

The Day Chávez Died

On March 5, 2013, Hugo Chávez died in a military hospital in Caracas after a long battle with cancer. For fourteen years, Chávez had dominated Venezuelan politics, reshaping the country through his socialist “Bolivarian Revolution.”

The man who announced his death was Nicolás Maduro—a former bus driver, union organizer, and Chávez loyalist hand-picked as successor just months earlier.

At the time, Maduro was not well known. He lacked Chávez’s charisma, military background, and revolutionary mystique. One Caracas housewife told the BBC she had never even heard of him before Chávez named him heir. Supporters within the ruling party disagreed. Former colleagues described him as disciplined, ideologically committed, and a skilled negotiator.

Those skills were tested almost immediately.

A month after Chávez’s death, Venezuela went to the polls. Maduro faced two immediate crises: runaway inflation and shortages of basic goods that were already making daily life miserable. Still, he had advantages. Oil prices hovered between $90 and $105 per barrel, giving the government enough revenue to keep Chávez-era social programs alive—for now. And Chávez’s endorsement still carried enormous weight.

Maduro won. Barely.

He defeated opposition candidate Henrique Capriles by fewer than 250,000 votes—less than two percent of ballots cast. Capriles refused to concede, alleging irregularities and demanding a full recount. International observers said Venezuela’s voting system was among the best in the world at the time, but critics pointed out that the electoral commission was stacked with government loyalists.

Whether Maduro won fairly or not remains debated. What mattered more was how he responded to the protests that followed. Security forces cracked down hard. Ten people were killed. Disputed elections, repression, and persecution of dissent quickly became defining features of his presidency.

And all of this was happening as Maduro inherited an economy already teetering on the edge of collapse.

Chávez’s Economic Time Bomb

To understand Venezuela’s implosion, you have to go back to Chávez.

When Chávez took office in 1999, oil prices were low and the economy was in trouble. Initially, he presented himself as a pragmatist, courting foreign investment and even ringing the closing bell at the New York Stock Exchange. But when oil prices rebounded, restraint vanished.

Chávez built an economy almost entirely dependent on oil. By the end of his rule, oil accounted for roughly 95% of Venezuela’s export revenue, up from about 80% when he took office. Any economics student could tell you that kind of dependency is dangerous. When prices are high, it feels like free money. When they crash, everything collapses.

For a while, the boom masked the risks. Chávez expanded free healthcare, brought Cuban doctors into poor communities, and slashed poverty. Illiteracy was nearly eliminated. Extreme poverty fell dramatically.

But the programs were expensive and poorly institutionalized. Corruption was rampant. Infrastructure investment lagged. And when the global financial crisis hit in 2008, oil prices collapsed from $123 per barrel to under $33.

Instead of cutting spending, Chávez doubled down—nationalizing industries, imposing currency controls, and declaring an “economic war.” Foreign investment dried up. Inflation soared. Shortages became common. Power outages spread as infrastructure decayed.

By the time Chávez died, Venezuela was living on borrowed time.

Maduro and the Freefall

Maduro inherited the wreckage—and made it worse.

In 2014, oil prices collapsed again, nearly halving in a single year. Venezuela’s central bank stopped publishing economic data. When figures finally emerged, they were catastrophic: deep recession, inflation over 60%, and a currency in freefall.

By 2016, the economy had shrunk by nearly 19%. By 2018, inflation surpassed one million percent. Prices doubled every few weeks. Paychecks became worthless before they could be spent. Saving money was impossible. Food and medicine vanished from shelves.

Living standards collapsed by 74% between 2013 and 2023—one of the worst peacetime economic collapses in modern history. Imports fell from $80 billion in 2012 to just $10 billion by 2017. Millions lost weight from hunger. Child malnutrition reached emergency levels.

This wasn’t just an economic crisis. It was a societal breakdown.

SOURCE

https://www.reuters.com/world/americas/trump-administration-seizes-oil-tanker-off-venezuela-coast-us-officials-say-2025-12-10/

https://www.bbc.com/news/articles/c0edxgx31zdo

https://www.imf.org/external/pubs/ft/history/2001/ch11.pdf

https://www.jstor.org/stable/4017674