system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: How come Venezuela is in such a poor state if it has nearly 300 Bn barrels of proven oil reserves?
gpt
All oil producing states too a hit when the price per barrel tanked. Venezuela in particular has a few problems. Theirs is high in impurities, which increases refining costs. Plus they were selling it for pennies on the dollar to their own citizens as well as key allies like Cuba. 

Venezuela's is what would be classified as a "banana republic". That is a country which is nearly entirely dependent on a single industry. Over 93% of their economy is tied to oil. Any shocks to this industry can have a catastrophic ripple effect. 

Adding to the problem is that Venezuela is not agriculturally self sufficient. Most of their food has to be imported. These goods are purchased from suppliers using US dollars, but are then purchased by citizens with the local currency. The Bolivar is not only worthless, but extremely volatile. The country's inflation rate is expected to reach 481% this year. If you started with an item that costs $10 on January 1st, it will cost $48.10 by December 31st. When you consider the average wage is $20 a month, a nearly 5 times jump in price is crippling. Stores are taking in less money than they paid for their stock, which means they have less money to buy new stock, and so on. Which is what's causing shortages.

Those who can get their hands on US dollars instead chose to buy goods on the black market. Criminals are taking big time advantage of the social breakdown, which is why the murder rate has become so high. 

On the government end, corruption has been running rampant for years now. Maduro and the other heirs of Chavez's Bolivarian Revolution are desperately trying to cling to power. The government also owns a big portion of the failed oil sector. Maduro will keep trying to blame capitalists and the US, but that will only go so far. Things aren't likely to end well for him. 

Incidentally, this is also likely the reason behind Cuba choosing to negotiate with the US government. The island nation was heavily dependent on Venezuelan economic and political support during the Chavez regime. Havana doesn't want to fall back to the dark ages of the 1990's after the Soviet Union collapsed.