From Oil Riches To Maduro’s Fall: How One Fatal Policy Decision Destroyed Venezuela? | World News

The United States managed to capture President Nicolás Maduro and his wife in a major operation in Caracas. Maduro will face federal criminal charges in the United States following his capture on January 3, 2026.

A lawsuit was filed on charges of narco-terrorism. His capture was announced by US President Donald Trump on Truth Social. He wrote: “The United States successfully carried out a large-scale attack against Venezuela and its leader, President Nicolas Maduro, who was captured and sent out of the country along with his wife. This operation was carried out in conjunction with the US Marshals.”

Latin American country that continues to face economic and political challenges under President Nicolás Maduro.

Also Read: Venezuela US News Live Updates| MEA Issues Advisory for Indian Citizens in Venezuela

The Fall of a Rich Petrostate?

Venezuela has one of the largest proven oil reserves in the world, at 303 billion barrels. With power concentrated in the hands of elites, the Venezuelan economy was based on Oil exports, and socialist government policies strengthened the country’s economy.

In a petro-state with high Oil and Natural gas reserves, the country faces challenges due to a commodities boom that has attracted large foreign investments, strengthening the local currency and making imports cheaper.

Thus, labor and capital are directed to extract resources from vital sectors such as ‘agriculture and manufacturing’ that ensure sustainable growth.

Over time, export industries weaken, unemployment rises, and the economy becomes overly dependent on volatile natural resource sales. In the case of Venezuela, the decline began during the global oil boom of the 1980s and was accompanied by Socialist reforms under Hugo Chavez.

The Socialist Policies of Hugo Chavez and the Catastrophic Collapse of Venezuela’s Bolivar

After the ouster of President Perez and the coming to power of populist leader Hugo Chávez in 1998, there was a change in governance, and Chávez launched a massive social spending spree using oil revenues. Funds were poured into sectors such as education, health, food and housing programs for a population of over 30 million without financial guarantees; short-term gains, but led to long-term economic destruction.

Chavez’s reforms led to increased dependence on revenue from oil exports. Desiring to increase Venezuela’s influence in the global oil market, increasing subsidies were poured in and oil was sold below market price to Latin American countries and China.

Oil windfalls enabled ‘Bolivarian missions’ to alleviate poverty, but expropriations and price controls led to shortages and increases in inflation in 2010. While foreign exchange controls squeezed imports, Petróleos de Venezuela (PDVSA) funds were diverted, causing production declines.

Nicolás Maduro and the Collapsed Oil-Rich State

Before Nicolás Maduro came to power in 2013, Venezuela was struggling with major economic and social problems under the rule of Hugo Chavez. High oil prices initially put a damper on beneficial social programs, leaving the country in crisis when Chavez died.

As the crisis in Venezuela deepens, arrested opposition leaders, closed news sites and imprisoned journalists have come under criticism from the United Nations and the Inter-American Commission on Human Rights.

In 2017, the Supreme Court wrested legislative powers from the opposition National Assembly. In 2018, Maduro was re-elected in a vote that many Western Hemisphere countries described as ‘illegitimate’.

Currency depreciation and sky-high inflation have pushed Venezuelans to desperate steps; Many drug cartels that ship narcotics to the United States have formed or joined.

The previous year saw increased sanctions imposed by US President Trump in early 2025; these sanctions escalated into a naval blockade in December 2025, targeting PDVSA exports and drug trafficking; This gave President Trump grounds for military action in January 2026 and led to the capture of President Maduro.