Andean Group - August 2026

For a nation reeling from years of economic decline, a collapsed state, deep-seated corruption, and political instability, the colossal twin earthquakes on 24 June were a damaging blow to hopes for a better life.

The massive twin shocks that struck northern Venezuela on 24 June, one of which was the strongest to hit the country in more than a century, imposed a huge loss of life and immense financial and economic cost. The death toll exceeded 6,000 as of early August, but the real figure is feared to be in the tens of thousands amid uncertainty over the number of disappeared. Reconstruction costs will be in the tens of billions of dollars.

Damage assessments vary depending on methodology, but all point to a catastrophe of historic proportions for Venezuela’s already fragile economy. Although President Delcy Rodríguez’s government has put the number of damaged or destroyed buildings at 855, an independent analysis of satellite data by researchers at Oregon State University estimated that the true figure was around 58,870. The coastal state of La Guaira was worst hit, suffering extensive damage and being placed under emergency military control with restrictions imposed on entry into the state. Caracas was also badly impacted, with buildings collapsing in several parts of the capital including the upscale Los Palos Grandes neighbourhood. The states of Yaracuy, Mérida, Carabobo, Aragua, and Lara also suffered varying degrees of damage.

The World Bank’s Global Rapid Damage Estimate (Grade) placed direct physical damage at roughly US$19.6bn, with residential buildings accounting for nearly half of losses, infrastructure for about a quarter, and non-residential buildings making up the remainder.

Other estimates run considerably higher. A preliminary assessment by the United Nations Office for Disaster Risk Reduction (UNDRR) assessment put direct physical damage closer to US$37bn – around 33% of Venezuela’s GDP – of which US$24bn corresponds to buildings and US$13bn to infrastructure. According to the UNDRR, the worst hit economic sectors were telecommunications (US$5bn in damage), the energy sector (US$3.1bn), roads and railways (US$2.1bn), water and sanitation (US$1.6bn), oil and gas (US$1.0bn), and ports and airports (US$300m).

Several economists have suggested that the true cost of recovery – including ‘building back better’ with improved construction standards and full debris clearance – could push total reconstruction costs towards US$50bn.

Landslides blocked or destabilised many roads across the affected region. Access to drinking water and sanitation has also deteriorated following the earthquakes, raising concern about the spread of infection. The national power grid was hit hard, with long-lasting blackouts in some areas. In Carabobo state, the 600MW Termocarabobo thermoelectric plant suffered significant damage, and was only operating at 50% capacity as of the first week of August, six weeks after the earthquakes. The quakes compounded a structural vulnerability in Venezuela’s grid, which was already operating well below installed capacity due to years of underinvestment.

Even before the disaster, upgrading the electricity system would have required US$11bn-$13bn in investment, according to Alexis Barroso, an engineering researcher at Venezuela’s Universidad Católica Andrés Bello.

The earthquakes have largely spared Venezuela’s core oil infrastructure. State oil company Pdvsa sustained no significant damage to production or refining facilities, and operations in the Orinoco Belt and Maracaibo Basin continued largely uninterrupted; the Amuay, Cardón, El Palito, and Paraguaná refineries all reported stable conditions, and the Morón petrochemical complex, which briefly shut down as a precaution after a storage tank leak, resumed operations within a day. Chevron and other multinational operators sustained no damage to their facilities.

The exact cost, priorities, and strategies will become clearer in a reconstruction plan the government hopes to have in place by late September, President Rodríguez said during a UN-led event to assess the country’s post-disaster needs.  The European Union (EU) and the World Bank are participating in the plan, with support from the Inter-American Development Bank (IDB) and the Latin American development bank (CAF).

“Our objective goes beyond rebuilding infrastructure: it is to fully restore families’ lives, strengthen human development and build more humane communities that promote wellbeing and harmony with nature,” Rodríguez said during the event.

Easing sanctions

Three days after the earthquakes, the US Treasury Department’s Office of Foreign Assets Control issued General License 60, which eased sanctions to allow transactions related to earthquake relief efforts. It expanded on existing broad humanitarian authorisations to ensure sanctions would not block life-saving disaster assistance, and it came amid a sustained easing of sanctions since the US captured Rodríguez’s predecessor, Nicolás Maduro (2013-2026), at the start of the year.

On 27 July, the Treasury’s financial crimes enforcement network (FinCEN) announced a temporary easing of financial controls. This shields US banks and financial institutions from regulatory action when processing transactions tied to humanitarian aid, housing, infrastructure rebuilding, and broader economic recovery in Venezuela.

Still, various relief groups and leading economists have called on Washington to go further and lift sanctions more broadly – including those touching the central bank and Pdvsa – to facilitate the country’s recovery.

Looking forward, the biggest question is how the reconstruction effort will be financed. The vast resources needed come on top of tens of billions of dollars required to kickstart the oil and mining industry and amid efforts by the government to renegotiate the country’s opaque foreign debt that new estimates place at US$240bn, far higher than initially thought.

An oil-led economic recovery would likely require vast amounts of upfront capital. Although President Donald Trump’s administration has called on oil firms to invest US$100bn to kickstart the sector’s recovery, independent analysis cited by the Journal of Petroleum Technology on 13 January estimated that it would take US$180bn in investment over the next 15 years to return to the 3m barrels per day level registered in the mid-2000s.

Debt restructuring, oil investments, and reconstruction all involve different players and mostly different sources of financing. Disaster-recovery financing typically flows through grants, multilateral lenders, and humanitarian channels – a very different pipeline from the private capital and bilateral investment that was meant to grow the oil and mining sectors. Still, the financing needs are so huge that there likely won’t be enough funding to go around, and that something will have to give.

Similarly, on the mining side, efforts to draw international firms to invest in the Orinoco Mining Arc following an overhaul of mining legislation in April now proceed against a backdrop of diverted government attention and a population skeptical that resource-focused investment will translate into visible improvements in daily life.

How Caracas and Washington balance disaster relief against the broader push to remake Venezuela’s extractive economy is likely to be one of the defining political and economic questions of the coming year.

Political fallout

The earthquakes didn’t just create a humanitarian catastrophe, they also accelerated and exposed the fragility of Venezuela’s new political arrangement, deepened public distrust in Rodríguez’s government, and accelerated a return to negotiations over the country’s political future.

Dissatisfaction has been widespread and persistent. Civilians and international humanitarian organisations, including the International Rescue Committee, have questioned the adequacy of the government’s response. By multiple accounts it was ordinary citizens who led much of the actual rescue and recovery work in the disaster’s crucial early days. Even amid the crisis there were allegations of corruption and foreign aid being blocked.

President Rodríguez has rejected criticism that her government reacted too slowly, and has alleged media bias against the administration’s efforts. She has announced new military units intended to improve the country’s disaster-response capacity going forward, in an implicit acknowledgment of the shortcomings exposed by the quakes.

Even before the earthquakes, Rodríguez’s government was unpopular. An AtlasIntel poll published in April put her approval at just 31%, down from 35% in March. A further 77% of respondents in April described the economy as bad, with 76% saying the same about the job market.

This dissatisfaction is not at all surprising. Rodríguez inherited the presidency thanks to a US military intervention to capture her predecessor, Maduro, who himself had remained in power despite clear signs he lost the 2024 presidential election. Rodríguez’s mandate is equally fragile and is based on a questionable constitutional provision that gave her two 90-day terms that expired on 3 July.

Transition talks

Under heightened pressure amid growing post-quake frustrations, on 6 August the government started negotiations with opposition figure Dinorah Figuera, president of the opposition’s parallel national assembly. Her counterpart is the official national assembly’s chief, Jorge Rodríguez, who is the president’s brother. These talks will initially focus on three priority areas: responding to the earthquakes, strengthening democracy, and political rights. The talks are backed by the US and come after nearly three decades of rule by the Partido Socialista Unido de Venezuela (PSUV). Figuera herself only recently returned to Venezuela from nearly eight years in exile.

Despite the failure of four previous attempts at dialogue between 2017 and 2024, there are hopes for more concrete progress this time given the unprecedented situation following Maduro’s ouster and the degree of US influence over the Rodríguez government.

Given the intensified questions regarding Rodríguez’s legitimacy since the earthquakes, she may have decided that engaging in structured talks offers her the best option to avert a total collapse of domestic and international credibility – creating a real incentive to participate seriously.

And yet it remains entirely uncertain what, if anything, will come out of the talks, not least because the negotiators lack broader representation and public support.  Most notably, Nobel Peace Prize-winning opposition leader María Corina Machado – Venezuela’s most popular political figure – was not invited to the talks. Nor was Edmundo González, the presumed winner of the 2024 elections.

Relations have deteriorated between Machado and Washington since January, with the opposition leader reportedly warned against returning to Venezuela. Although US officials have insisted that Machado would be at risk if she returns, this stance has fueled speculation that the Trump administration does not want to jeopardise the cooperation it is receiving from the highly amenable Rodríguez by holding elections in the immediate future.

US Secretary of State Marco Rubio sought in early August to downplay expectations for elections any time soon, saying that much work is required beforehand. He laid out a list of conditions that need to be fulfilled first, saying: “You have to have true freedom of the press. You have to have multiparty participation. You have to have national reconciliation. You have to have an electoral commission that will accurately count the votes”. He added: “I think it’s going to require some persistence and a little bit of patience”.