Venezuela’s Yearly Petroleum Exports Demonstrating The Recent and Continued Decline in Exportation [1]
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2008- Present Day Economic Troubles and Their Effect on Oil Policy` Since 2014, oil production in Venezuela has really suffered from a bad market and Venezuela’s insufficient funds for the industry. Venezuela’s nationalistic oil policies have not succeeded in making them more independent from their oil customers. In 2016, the United States imported 291,461,000 barrels of oils from Venezuela, an amount consistent with imports in the five years prior [2]. To assuage the oil price decline which began back in June 2014 and continues through to today, Maduro has directly printed more currency, resulting in inflation as high as 700% of what the inflation rate was in 2014. [3]. Yet by 2016, the oil production reached the lowest it had been in 23 years (ref: https://www.focus-economics.com/countries/venezuela/news/commodities/venezuelan-oil-prices-tumble-in-march-compounding-pressure-on. According to analysts, the economic woes Venezuela suffered under President Nicolás Maduro would have still occurred with or without Chávez.[48]
In April 2017, a controversial Venezuelan Supreme Court ruling granted Maduro executive powers over PDVSA, which allow him act autonomously in selling shares or make international agreements of the oil company [4]. Some countries oppose this great upsurge in Maduro’s personal power. Among them, the United States has announced multiple sanctions against Venezuelan Oil, although such legislation has been mainly for political statement with no significant economic impact [5]
Figure Depicting Venezuelan Exports and the Interdependence Between the U.S. and Venezuela [6] Both OPEC and non-OPEC contributors to the oil industry agreed to scale back their daily oil production by 1.8 million barrels per day to improve the supply-demand balance of the industry [7]. Despite the collective efforts, oil prices dropped by 4% [8]. By 2017, PDVSA could not even afford to export oil through international water, which requires safety inspections and cleaning under maritime law, with a fleet of tankers stranded in the Caribbean Sea due to the issue.[49] In July 2017, this arrangement was extended from just the first half of 2017 to continue until March 2018 [9] [10] This continued depression in income from oil has led Maduro to pressure the OPEC to raise the falling oil prices to help the Venezuelan economy. [11]
Whilst oil production in Venezuela remains around 1.9 million barrels a day, the country is only exporting and profiting off 42% of its product. [12]
In August 2017, the PDVSA struggled to repay $725 million of debt, part of a total $5 billion owed, despite the fact Venezuelan citizens are experiencing ongoing famine. [13] [14] Fearing loss of their stake and high position in the oil industry, Venezuela is rushing to pay back their investors to forestall requests for oil reserves as collateral.
- ^ http://oilprice.com/Energy/Crude-Oil/Desperate-to-Boost-Oil-Production-Venezuela-Moves-to-Devalue-Currency.html
- ^ https://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbbl_a.htm
- ^ http://foreignpolicy.com/2017/05/02/the-maduro-regime-is-heading-for-a-soviet-style-collapse-venezuela
- ^ http://www.reuters.com/article/us-venezuela-politics-oil-analysis/venezuelas-maduro-wins-power-over-oil-despite-court-reversal-idUSKBN1740XF
- ^ https://www.forbes.com/sites/timworstall/2017/08/26/us-imposes-more-sanctions-on-venezuela-politics-yes-little-economic-effect-expected/#1e2f11307074
- ^ https://www.eia.gov/todayinenergy/detail.php?id=9651
- ^ https://www.reuters.com/article/us-opec-oil/opec-non-opec-set-for-new-oil-cut-eye-longer-duration-idUSKBN18K0W9
- ^ https://www.cnbc.com/2017/05/25/opec-agrees-to-extend-oil-production-cuts-for-nine-months-delegate-tells-reuters.html
- ^ https://www.cnbc.com/2017/07/10/opec-and-non-opec-production-cuts-can-go-longer-and-deeper-if-necessary-says-russia-energy-minister.html
- ^ https://www.reuters.com/article/us-opec-oil/opec-non-opec-set-for-new-oil-cut-eye-longer-duration-idUSKBN18K0W9
- ^ http://www.businessinsider.com/venezuela-desperate-for-higher-oil-prices-2017-7
- ^ http://money.cnn.com/2017/07/13/news/economy/venezuela-oil-production/index.html
- ^ http://money.cnn.com/2017/07/13/news/economy/venezuela-oil-production/index.html
- ^ http://www.foxbusiness.com/features/2017/08/02/venezuelan-default-fears-rise-with-billions-in-debt-coming-due-soon-update.html