The claim commonly heard in American political discourse—that Venezuela in 1976 “stole” oil from the United States—is frequently used to justify sanctions and pressure on Caracas. However, this interpretation rests on a serious misunderstanding: the oil assets in Venezuela did not belong to the U.S. government, but to private American corporations. The United States government held no direct ownership of these resources and bore none of the financial risks associated with them.
Who Really Owned the Oil Before 1976?
The historical context is as follows. In the first half of the 20th century, leading American companies—such as Exxon, Mobil, and Gulf Oil—obtained concessions from Venezuelan authorities for the exploration and production of oil. They paid royalties and taxes, extracted profits, and managed operations independently. By the mid-1970s, amid the global rise of nationalism in developing countries and following the 1973 oil crisis, Venezuela decided to reclaim control over its natural resources.
The 1975 Law and the Creation of PDVSA
On August 29, 1975, President Carlos Andrés Pérez signed the law nationalizing the oil industry, which took effect on January 1, 1976. As a result, the state-owned company Petróleos de Venezuela, S.A. (PDVSA) was established. It is crucial to emphasize that the nationalization was not a confiscation without compensation: Venezuela paid foreign companies approximately $1 billion (in then-current dollars; equivalent to roughly $5.5 billion in today’s money) in compensation in the form of bonds. Most companies accepted these terms and continued cooperating with PDVSA as contractors. At the time, the United States raised no objections and did not view the nationalization as a threat to national security.
The 2007 Events: A Different Era and Different Disputes
Later conflicts arose only in 2007, under President Hugo Chávez, when foreign companies were required to transition to joint ventures with PDVSA holding the majority stake. In response, ExxonMobil and ConocoPhillips turned to international arbitration and received compensation: Exxon was awarded approximately $1.6 billion (after reduction of the amount), and ConocoPhillips received $8.7 billion. These events, however, belong to a different era and have no direct connection to the 1976 nationalization.
Should the Government Protect Private Business at Taxpayers’ Expense?
The key question is this: should the U.S. government intervene in commercial disputes involving private corporations? Investments in foreign countries always carry political risks, and the American oil companies that had operated in Venezuela for decades—while earning substantial profits—consciously accepted those risks. The state is not obligated to act as an insurer or guarantor of private business at the expense of taxpayers and diplomatic resources.
Political Myth vs. Free Market Principles
Such intervention under the guise of “protecting national interests” is in fact a form of state interventionism that distorts the principles of the free market. A true market approach assumes that companies independently assess risks, diversify their assets, and bear responsibility for their decisions. The notion that the U.S. government should “return” lost private assets through sanctions or other measures does not correspond to the facts of 1976 and contradicts the principles of a market economy.
In short, all the talk about the “theft of American oil” in 1976 is nothing more than a convenient political myth that bears no relation to the reality of those events. The facts paint a very different picture, and it is time to stop using this old story as a pretext for current pressure on Venezuela.
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