Venezuela's Oil Curse: Why World's Largest Reserves Lead to Poverty

• Venezuela, despite holding the world's largest oil reserves (over 300 billion barrels), faces severe poverty, hunger, and inflation.
• Its crude oil, primarily from the Orinoco Belt, is 'extra-heavy' and 'sour' (high sulfur), making extraction complex and expensive, requiring thermal recovery and diluents like naphtha.
• Venezuelan oil is sold at significantly lower prices than benchmarks like Brent or WTI due to its poor quality, high sulfur content, and limited refining capabilities.
• Only specialized 'complex refineries' (e.g., US Gulf Coast, India's Reliance Refinery) can process this oil, limiting its market and increasing refining costs and carbon emissions.
• Government mismanagement, corruption within PDVSA, and an over-reliance on oil have crippled production and revenue, leading to the country's economic collapse.

Why It Matters: Venezuela's vast oil reserves are a burden due to complex extraction, poor quality, and mismanagement, causing widespread poverty.