Yet albeit Venezuela was pumping at capacity, oil prices are at their lowest in years. Thanks to an enormous drop by global demand, a result of a worldwide depression. Unleashed by the COVID-19 pandemic.
‘Trump’s knee on our neck’ – Up to 2018. Venezuela was sending 500,000 BPD to us alone and received reciprocally 120,000 BPD of sunshine oil, diluents, and fuel-producing supplies.
Sanctions, however, have forced Venezuela. Which wont to refine enough oil for its own needs, to show to allies like US nemesis Iran to alleviate a desperate gasoline shortage.
Sharpening Venezuela’s Cycle of Recession
All this is often “sharpening Venezuela’s cycle of recession,” said economist Jose Manuel Puente. From the general public Policy Center at the Institute of upper Education Administration (IESA).
Venezuela is heading for a seventh straight year of recession, during which era its economic process has halved.
Making matters worse, Venezuela is selling the small oil it exports “at a loss” thanks to the worldwide price drop, and therefore the dealings it must operate to figure around US sanctions, said Puente. The country “is on the brink of collapse,” he said.
Central Bank advisor Carlos Mendoza Potella is critical of the government’s policies but says US sanctions played a serious role within the oil industry’s demise.
“They’re strangling us, we have got (President Donald) Trump’s knee on our neck,” said Mendoza Patella.
Even without sanctions, though, he doesn’t see a future with oil. As a “driver of development” thanks to the high costs in extracting Venezuelan crude.
Venezuela has the world’s largest proven crude reserves. But “that serves no purpose” if you cannot extract and sell it at a profit.
Puente believes the world cannot recover without private investment.
“Alone we will not roll in the hay. we do not have the technology or the financial and human resources,” he said.
The latest drop by production coincides with a flare-up of tensions between Maduro and opposition leader Juan Guaido, who declared himself acting president 18 months ago, earning recognition from quite 50 countries.