Photo: Sofía Jaimes Barreto

The End of the Oil Era

Oil for May delivery is worth less than nothing. For the first time in a hundred years, Venezuela is staring down a future with no oil income. I’m sure it won’t be missed.

Yesterday, Venezuela entered the post-petroleum era. With oil prices for May delivery falling sharply below zero, the country faced the prospect of life without any oil revenue for the first time in over 100 years. Venezuela without oil money is not the Venezuela any of us know. It’s an epochal change. 

In the interim, the country has been transformed beyond recognition. The last time it had to make due without oil rents it was a backward economy with little functioning internal transport or infrastructure, no public health or education system worth the name, and a thuggish dictator in power ruling a military regime he’d built on fear and repression a few years after the death of the charismatic predecessor who brought him into the halls of power. Come to think of it, it’s freakish how little has changed. 

I’m old enough to remember when we used to call the 1980s “the lost decade” — a tag that sounds heartbreakingly naïve from our current perspective. Venezuela instead will need to call 1920-2020 the lost century: a hundred-year span that saw the nation flourish, briefly, only to have every single one of its social, economic, educational and health advances cruelly clawed back. The span between the two pandemics — l’entrepandemie between 1918 influenza and 2020 COVID-19saw many changes, but one constant: a state hyper empowered by oil rents, a society catastrophically unable to harness them to serve the nation’s prosperity, and an intelligentsia addicted to the illusion that they would succeed where others had failed if only given the chance.

Venezuela without oil money is not the Venezuela any of us know. It’s an epochal change.

In reality, of course, yesterday’s bizarre oil price anomaly in contracts for WTI May deliveries is just a convenient marker in the road to our new post-petroleum normal. Long before prices turned upside down, Venezuela’s oil industry had seized up almost completely, the victim of mismanagement and graft on a scale scarcely conceivable to those who have not lived it. But we need dates for the same reason we need mile markers, to get our bearings, take stock of how far we’ve come and where the road leads next. 

Which is why yesterday’s milestone should command our notice. 

If Venezuelans had any solid reason for hope that the country would one day be able to overcome its centennial failure and finally put oil rents at the service of the people, we might rue the end of our oil era. As it stands, I think the country collectively has gotten over the long, beguiling mirage. It took a tragedy of unimaginable proportions to bring us to this point, but in return we at least get a flash of clarity, one we need to cling on to now more fiercely than ever if our mistakes are not to be repeated. 

Because today, we see it clearly. Oil will not build Venezuela. It will not educate Venezuela. It will not enlighten Venezuela. It will not democratize Venezuela. It will not enable Venezuela’s diversification or industrialization or resurgence or effervescence or any other such thing. 

The road ahead is hard, but perhaps this moment of bright white clarity can make it more bearable. 

Oil is not the solution to the problem. Oil is the problem.