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In a three-year span from 1914 to 1917, three more oil fields were discovered in Venezuela. However, due to the First World War, and the lack of safe passage for transport ships, the oil industry in Venezuela began to suffer the loss of its European customers. In the year 1917, most of the oil drilling operations was executed at the San Lorenzo refinery, which was owned and operated by Caribbean Oil. It was in 1922, when even more oil was discovered in Venezuela (which then made them the largest oil exporter) that Venezuelan presiden Juan Vicente Gomez let the United States and their corporations write the laws for Venezuelan petroleum.
The emphasis and the importance of oil to Venezuela's economy were can be seen in the events of 1920's Venezuela. When the oil industry began to boom, and all importance placed on it, other sectors of the country began to diminish. In particular, agriculture suffered a heavy decline in the 1920's and 1930's. While in the 1920, agriculture counted for one third of the Venezuelan economy, in the 1950's it only accounted for one tenth of the Venezuelan economy. What we begin to see there is the early steps to the economic imperialism that plagued, and still plagues Latin America. .
In the year 1941, former army general Isaias Medina Angarita enacted the Hydrocarbons Act of 1943. He sought nationalization of the oil industry. Under the Hydrocarbons law, there would be a fifty-fifty split of the profits made from Venezuelan oil. One half to the companies, the other to the government. .
Venezuela granted newer concessions to help stimulate the discovery of more oil fields in 1944. Due to the high demand for oil by the allies of World War II, Venezuela was producing close to 1 million barrels a day. After the war, Venezuela's importance of oil exportation was also relied upon to help fuel the automotive boom post World War II. Due to United States oil interest in the Middle East, and the availability of Middle Eastern oil in the 1950, quotas were enacted.
