How Socialism Wiped Out Venezuela’s Spectacular Oil Wealth

"At this moment Venezuela is living through its worst nightmare," said Luis Pedro España, a professor of sociology at Andrés Bello Catholic University in Caracas, who has studied the nation's economic collapse. "We are witnessing the end of Venezuela as a petro-state."

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Venezuela has the world's largest proven oil reserves and yet the country has run out of gasoline. The socialist government has lost the capacity to extract oil from the ground or refine it into a usable form. The industry's gradual deterioration was 18 years in the making, tracing back to then-President Hugo Chávez's 2003 decision to fire the oil industry's most experienced engineers in an act of petty political retribution.

The near-total collapse in the nation's oil output in the ensuing years is a stark reminder that the most valuable commodity isn't a natural resource, but the human expertise to put it to productive use.

The little gas that is still available comes via periodic shipments from Iran. But the Venezuelan government doesn't officially charge at most gas stations. It uses a quota system, so filling a tank can mean waiting in line for days.

The Venezuelan oil industry turned a once poor agricultural nation into an important geopolitical player and one of the region's richest countries.

The economic crisis has caused much of the nation's educated middle class to flee the country, which will make rebuilding Venezuela's human capital an even greater challenge. In an ironic twist, Chavez's hand-picked successor, Nicolás Maduro, is now working to bring privately-run foreign oil companies back in.

Produced by Andrés Figueredo Thomson and Regan Taylor; translation by María José Inojosa Salina.

Music Credits: Homeroad, Nothing, and Run by Kai Engel; Suspect Located by Scott Holmes

Photo Credits: JORGE SILVA/REUTERS/Newscom; Juan Carlos Hernandez/ZUMA Press/Newscom; KIMBERLY WHITE/REUTER/Newscom;