Maduro’s squandering of Venezuela’s oil wealth is a tragedy

Venezuela should be a global oil-exporting superpower. Instead, the Marxist junta ruling the country teeters on the brink of complete economic collapse, with hyperinflation reminiscent of Weimar Germany and the chances of a political coup d’état in Caracas rising every day. Despite its enfeebled state, Venezuela punches above its weight in oil markets. Uncertainty over its supply has helped to push up prices by almost 20% since the start of the year. That’s because many refineries in Texas and Louisiana – America’s fuel-producing engine – are configured to process Venezuela’s heavy blend of crude. The country supplies about 50% of the oil used by the southern states’ plants dotted around the Gulf of Mexico. Finding suitable alternatives at short notice won’t be easy. “Crude oil production in Venezuela, and especially exports to the US, are expected to drop in response to the growing political crisis and the US implementing new sanctions against its state-run oil company, PDVSA,” said Ole Hansen, head of commodity strategy at Saxo Bank. Go deeper – Factbox: US sanctions on PDVSA, accelerate output decline Daily shipments to the world’s largest economy have slumped below 500,000 barrels, down from over 1.2 million b/d a decade ago, according… continue reading

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Source: CTRM Center

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