WHATEVER you may think of US National Security Adviser John Bolton, he is at least honest about the reasons for US aggression towards Venezuela. While Britain’s Foreign Secretary Jeremy Hunt and Latin America Minister Alan Duncan try to justify Britain’s craven support for US imperialism by falsely accusing President Nicolas Maduro of rigging elections, Bolton has openly stated that he wants US corporations to control and run Venezuela’s oil industry.

In other words, he wants to reverse the nationalisation of the oil industry that took place in 1976 when the then Venezuelan president Carlos Andres Perez created Petroleos de Venezuela (PDVSA).

Venezuela’s hydrocarbon boom began in 1922 when Shell discovered huge deposits of oil in the Maracaibo basin. In 1920/21, Venezuela had been a small producer exporting 100,000 barrels of oil that were worth one ninth of the country’s coffee exports over the same period. By 1926/27, annual exports were six million barrels, and by 1935/36, 23 million barrels or 20 times the value of exported coffee.

Under the dictatorship of Juan Vicente Gomez, oil companies from the US and Europe were given long leases and generous tax breaks that brought them huge profits. By the end of the 1930s, Shell, Standard Oil and Gulf controlled 99 per cent of production and the state retained only between 10 and 20 per cent of the profits. Needless to say, neither the US nor British governments of the day had anything to say about the democratic deficit in Caracas.

Although the foreign companies kept the lion’s share of the revenue, the discovery of oil transformed Venezuela into a predominantly urban society, broke the power of landowning elites and introduced a US-style consumer culture into a hitherto rural backwater of South America.

Conditions for oil workers in Maracaibo were very poor but marginally better than working on the land and, despite the industry only providing employment for a small percentage of Venezuelans, within 40 years the economy was transformed, making the republic the richest — and most unequal — in Latin America.

Gomez died in 1935 and by 1943, a combination of labour unrest, worries about the precedent of Mexico’s 1938 oil nationalisation and increasing demand from the US war effort precipitated a new settlement that raised taxes on oil revenues in return for extended concessions of up to 40 years. In 1960, Venezuela became part of the new Organisation of Petrol Exporting Countries (Opec) and took full advantage of the Arab embargo on the US, after the 1973 war with Israel, to raise national income by 40 per cent in 1974.

The embargo was short-lived and ended in March 1974, but the cost of a barrel of Saudi oil rose from U$1.39 in 1970 to U$8.32 by January 1974, a pivotal moment that convinced Wall Street and Washington that such a scenario could not be tolerated again. It forced the US to recognise Saudi Arabia’s strategic importance and the protection of oil supplies moved from being a priority to an obsession.

Part of the West’s strategy to avoid a repeat of the prices hikes and shortages occasioned by Opec actions involved the diversification of production to areas such as Alaska and the North Sea and by 1984, Venezuela’s share of global production had dropped dramatically.

The golden years of the oil boom had financed imports of manufacturing inputs and consumer goods as well as being collateral for government loans. A rise in interest rates and a drop in oil prices proved catastrophic for the Venezuelan economy and were a key factor in the rise of civil unrest that culminated in the “Caracazo” massacre of 1989 and the subsequent rise of Hugo Chavez.

More recently, the large-scale exploitation of shale oil in North America has depressed the price of the product on the global markets and there is over capacity worldwide. Nevertheless, refineries on the Gulf Coast need the type of crude oil that Venezuela provides so any US boycott of the country’s exports will have an effect on them. It should also be borne in mind that the ALBA trade initiative, developed by Chavez and incorporating Petrocaribe, a scheme that provides cheap oil to Caribbean countries who were paying the highest oil prices in the world, constitutes a threat to the hegemony of US oil companies in the region.

Venezuela’s dependence on oil exports to pay for the import of medicines, foodstuffs and other necessities has left the country vulnerable to the illegal economic blockade being mounted by Trump and Bolton. Successive governments, including those of Chavez and Maduro, have failed to diversify an unbalanced economy and the lack of an agrarian reform has ensured that large tracts of land that could be used to grow food for domestic consumption are not exploited.

What the republic does have in abundance are reserves of gold, diamonds, and coltan, a mineral used in mobile phones and an array of consumer electronic devices, but any economy based on the extraction of primary products is environmentally damaging and can perpetuate dependency.

The recognition that climate change is the most serious issue facing humanity today and that the production and burning of oil must be curtailed if we are to avoid an existential crisis does not resonate in the White House. It is estimated that Venezuela is still sitting on some 300 billion barrels of oil, the largest reserves in the world, and it is this that Bolton and the other hawks on Capitol Hill want to control and exploit for their own benefit.

The attempts to unseat the legitimate government of Venezuela have nothing to do with “restoring democracy” or overthrowing a “dictator.” As ever in Venezuela, it’s all about the oil.