Were Half of Venezuela’s Oil Revenues Really Stolen? — Part II

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DENVER, Colorado, USA, Oct 23 2026 (IPS) –
Cash chase

If Venezuela declares to be importing from the rest of the world approximately as much as it was exporting throughout those years, and the rest of the world verifies Venezuela’s story, then where could those extra $11 billion that most likely ended up in the bank accounts of Maduro’s cronies be?

Technically, there are some methods which a nation might invest as much as it makes and still have large amounts go missing out on. The very first apparent one is if there were $11 billion lying around to take. Other than we understand there weren’t, since the Venezuelan federal government was broke and had all its global accounts frozen. Even the Central Bank didn’t have access to the majority of its global reserves at the time. And keep in mind, the Times is informing us that these $11 billion were coming out of unsettled receivables. Simply put, the oil was being offered, it was being filled into ships, and the owners of these ships were guaranteeing to pay Venezuela for that oil however, according to the Times, never ever did.

Another possibility is that Venezuela was building up properties due to the fact that somebody was providing it cash. That description does not pass the odor test either. No one in their ideal mind would have provided $11 billion to Venezuela in 2021 and 2022. The nation was approved, disallowed from releasing any kind of financial obligation in the United States, and even non-US mutual fund would not go near it with a 10-foot pole. The nation didn’t even have access to checking account where a loan of that size might be wired.

And, rather honestly, if, state, China or Russia had provided Venezuela $11 billion and in some way gotten those dollars to Venezuela, do not you believe the New York Times, or Reuters, or the Wall Street Journal, would have composed a story about that? And, by the method, where is that $11 billion financial institution attempting to get their cash back? No other Venezuela financial institutions appear to understand about them, which is rather odd for a nation that has actually simply revealed that it’s about to begin reorganizing its financial obligation.

In amount, no one provided Venezuela $11 billion in 2021– 22 since anybody misguided enough to do so would not have actually been providing the cash; they would have been providing it away. The nation currently had a financial obligation that was well in excess of its capability to pay, and nation threat premiums were through the roofing system. The anticipated return on any Venezuela financial obligation issuance in those years would have been no.

Digging in

Now here it is really worth picking up a minute and looking thoroughly at the numbers in the nation’s bank account, since what the balance of payments information permits us to do is not simply take a look at just how much the nation gets and invests in forex, however likewise where that cash originates from and where it goes. And here the story gets fascinating due to the fact that, unusually enough, what these numbers appear to inform us is that the Venezuelan federal government did obtain around $11 billion (or, more specifically, $10.4 billion) in those 2 years. They likewise inform us that it collected some $14 billion in receivables, specifically the ones that the New York Times is informing us were not paid.

State you had actually simply come down from Mars, understood absolutely nothing about Venezuela’s pariah status at the time, and looked at these numbers. You would state: well yes, Venezuela obtained $10 billion in those years and at the very same time built up $14 billion in receivables (that is, guarantees to pay in the future) for its oil sales. And if then, on your brief journey from Mars, you got a copy of the New York Times and read it, you would state: well, it appears like of those $14 billion, around $11 billion never ever made money.

Why does the nation’s existing account information get us these numbers that are so unusual? Herein lies what I believe is the resolution of the concern.

Below is a slide from a discussion prepared by PDVSA in late 2022, where it reports all of the oil that was offered in between 2020 and 2022.[1] Keep in mind that $13.3 billion in billings were delivered to the Republic. That’s in fact a bit greater than the Times’ $11 billion due to the fact that it consists of 2020. To put it simply, the federal government was spending for its imports through oil deliveries since it might not utilize global savings account as an outcome of United States sanctions. Generally, PDVSA would have offered the oil, got dollars in payment, and offered those dollars to the Central Bank. The federal government would have gone to the Central Bank and purchased dollars from it to pay importers.

Exhibition 1: November 2022 PDVSA Presentation Shows Receivables Ceded to Republic

Source: Ministry of Popular Power for Oil.

Because that system might not be utilized, the federal government turned to paying in-kind. It went to the importers and stated: appearance, if you bring this much in imports into the nation, we’ll let you go and gather from individuals who purchased our oil and who owe us cash.

If you look at the decay of the expected loaning that the federal government did, you’ll discover $6.3 billion of portfolio financial investment securities being released by the federal government. Which rhythm of approximately $500 million per quarter continues till completion of 2025. That’s not since the federal government is releasing bonds. Think me, if the federal government had actually released a single bond, we would understand about it (and whoever had actually purchased that bond would have ended up being the laughingstock of the securities world). If you look at the great print of the IMF’s Balance of Payments Statistics Manual, you’ll discover that what defines portfolio financial investment is the reality that securities have to be flexible. And this is specifically what Venezuela was offering importers: flexible IOUs that they might exchange for oil receivables entitling them to get payment for oil that Venezuela had actually offered.

We discover a really direct declaration of this in another slide of the PDVSA 2022 discussion, where the board states, in talking about cases of cesión de facturas (project of billings) representing deliveries asked for by the National Executive, that these were utilized to compensate financial obligations with companies of the Republic

There it is: we’ve discovered our secret loan provider: importers who were being provided financial obligation so that they might exchange them for oil deliveries. When you see the balance of payments accounts state that the federal government was building up receivables and providing financial obligation, what you are actually seeing is the method in which balance of payments stats manage a practice that is as old as mankind: barter.

Oil and bias

Truth is typically a lot more prosaic than what we desire it to be. Federal government cronies did not leave with $11 billion in unsettled oil deliveries. What actually took place is something much easier: Venezuela didn’t have a method to pay in money for the imports it required, so it wound up paying with oil. And since PDVSA, the state-owned oil business, is lawfully unique from the Republic, it did not straight gather on the deliveries however rather moved them to the Republic in payment of its tax and royalty commitments.

American reporter Sydney Harris when composed that “our company believe what we wish to think, what we like to think, what matches our bias and fuels our enthusiasms.” And yes, the concept that Maduro’s henchmen strolled off with $11 billion in oil deliveries feeds well into lots of stereotypes of Venezuela under Maduro. Even if it sits awkwardly with the truth that he does not appear to have cash to spend for his defense in a Brooklyn court, the majority of us are inclined to think it.

Yes, Maduro’s routine was extremely corrupt. Nobody puts that in doubt. There is a long range in between acknowledging its corruption and declaring that program experts strolled away with half of the nation’s oil exports. That image might fit a great deal of political stereotypes and work for numerous political stories. It simply does not fit the realities.

Francisco R. Rodríguez is a senior research study fellow at the Center for Economic and Policy Research (cepr.net) in Washington, DC and a teacher and fellow at the University of Denver’s Korbel School of International Studies.

[1] I got this discussion 2 years back from press reporters who composed stories on it and who asked me to see it to discuss their analysis of it.

IPS UN Bureau