Economic Fallout of Venezuela Earthquake Rises as Death Toll Climbs

The series of powerful earthquakes that struck Venezuela on Wednesday may result in economic losses amounting to as much as 7% of the nation’s GDP, according to preliminary estimates from the United States Geological Survey.

Initial assessments released on Thursday indicate that the damage could range from 1% to 7% of Venezuela’s $111 billion GDP following twin quakes of magnitude 7.2 and 7.5 that struck roughly 160 km (100 mi) west of Caracas on Wednesday afternoon, resulting in at least 188 fatalities.

Interim President Delcy Rodríguez announced a $200 million fund from the International Monetary Fund to support the reconstruction of infrastructure, hospitals, and housing.

Significant reconstruction will likely be required, necessitating foreign assistance from the United States, regional partners, and international financial institutions. The government has moved swiftly to announce a reconstruction fund supported by the IMF, as noted by Rachel Ziemba, an economist and senior adjunct fellow at the Center for a New American Security, in comments to Al Jazeera.

Other adjustments to the sanctions regime may be necessary to facilitate remittances, capital flows, and greater flexibility for imported material.

The United States is dispatching resources to evaluate the damage and deliver aid. Secretary of State Marco Rubio stated that rescue operations have been deployed and that a clearer picture of needs will emerge within the next 48 hours.

‘We will mount a comprehensive government response,’ Rubio said on Thursday to reporters in Bahrain, amid logistical challenges compounded by the closure of Simón Bolívar International Airport, the nation’s primary air hub.

Observers are closely monitoring how the US response will influence diplomatic relations.

‘I believe this could present an opportunity, perhaps a catalyst, to drive the relationship toward a positive economic trajectory,’ John Deal, managing director of capital markets at the Post Oak Group investment bank, told Al Jazeera.

‘The administration has shown strong interest in securing oil and gas assets, and it does not appear that Venezuela’s oil infrastructure suffered major damage. However, the country has incurred extensive damage in the most psychologically sensitive region: its capital city,’ Deal said.

The United Nations has also “fully mobilised” its humanitarian response, the group’s chief said, and Switzerland has dispatched 18 tonnes of rescue equipment to support local authorities. Al Jazeera’s Noris Soto reported from Caracas that private firms have been asked to assist with rubble removal.

Aid efforts face added challenges amid an already fragile economic environment. Of the country’s 31.7 million inhabitants, over 20 million were already living in poverty with limited access to food and medicine, and many hospitals lack reliable water or power.

At Caracas’s Hospital de Clínicas, staff were instructed to double up on night shifts to care for the injured, a worker reported. Classes have been cancelled for the remainder of the week as authorities assess the damage.

The damage adds to pre‑existing challenges to the nation’s health and housing infrastructure. Health data from Venezuela is scarce, with the government having ceased publishing epidemiological bulletins since 2016.

Approximately 10 % of the population was already living in vulnerable conditions due to inadequate housing, according to a 2023 National Survey of Living Conditions report from researchers at Andrés Bello Catholic University in Caracas. The housing market has been frozen amid heightened inflation and declining purchasing power.

Oil impacts

The earthquakes had a limited impact on Venezuela’s oil and gas sector, which normally produces 1.2 million barrels per day of crude. Preliminary reports shared with Reuters indicate that the El Palito refinery in central Carabobo state, near the epicentre, did not sustain damage.

Meanwhile, at the Morón Petrochemical Complex — Venezuela’s second‑largest petrochemical plant — production restarted on Thursday after a brief shutdown. Workers were instructed not to report as initial assessments identified a leak in a storage tank on Wednesday; it remained unclear whether the leak had been repaired following the reopening order, according to Reuters.

Chevron told Al Jazeera that it remains operational.

‘As a longtime employer and partner in Venezuela, we stand in solidarity with the country and its people during this difficult time. We remain committed to supporting our employees and the communities surrounding our facilities and ensuring the continued safe operation of our assets,’ a Chevron spokesperson told Al Jazeera.

Other companies, including Shell, Eni and Repsol said that all workers are accounted for.

‘The human toll is likely to exceed the economic impact, especially if, as appears likely, energy infrastructure remains largely undamaged. While most of Venezuela’s revenue derives from oil, US sanctions limit the flow of such funds into the country,’ Ziemba, the economist, added.

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