Category: Venezuela

While Pope Francis is applauded for helping broker this week’s U.S.-Cuba accord, a key motive for Cuba is Venezuela’s diminishing oil gifts to its biggest ally. Venezuela sent about 100,000 barrels a day to Cuba last year in exchange for medical personnel as part of a regional subsidy program to promote the government’s socialist message. While there’s no official data for shipments to Cuba this year, anecdotal evidence suggests volumes have already slumped to about 70,000 barrels a day, Moody’s wrote Dec. 16. The regional aid is set to be scaled back further as oil’s biggest rout in a decade undermines a socialist revolution that transformed Venezuela over the past 15 years under Hugo Chavez and Nicolas Maduro , according to Eurasia Group and EnergyNomics. The commitment by Cuba and the U.S. to normalize relations opens the door for the island nation to buy more oil on the open […]

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The Venezuelan bolivar currency is presented next to the U.S. dollar (JUAN BARRETO/AFP/Getty Images) Summary The Venezuelan economy continues its downward spiral as 2015 approaches. Faced with rising domestic expenses that it can no longer meet through dollar income from oil exports alone, Caracas has accelerated measures to increase its money supply since 2012. The central bank has also printed more bolivars to keep up with spending obligations. This expansion of the monetary supply has spurred inflation, which was already exacerbated by government foreign exchange mechanisms and smuggling to Colombia, making food and goods less available to consumers in Venezuela. The decline in global oil prices that began in September has compounded these troubles. Analysis Venezuela’s government has traditionally distributed foreign currency in its economy through the Sicad I and the Sicad II mechanisms. Before August, the Sicad I auctioned about $880 million per month and Sicad II disbursed […]

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Venezuelan President Nicolas Maduro raises his fist as he arrives to a rally congregating thousands of representatives of regional social movements in Santa Cruz, Bolivia on June 14, 2014, where the G77+China Summit will take place. Leaders of developing nations plus China meet here Saturday to draft a global anti-poverty agenda at a summit that also showcases Latin America’s burgeoning relationship with the Asian giant. AFP PHOTO/CRIS BOURONCLE (Photo credit should read CRIS BOURONCLE/AFP/Getty Images) The US Congress on Wednesday voted to restrict travel and freeze assets on some Venezuelan government officials it accuses of human rights abuses during a crackdown on protests against socialist President Nicolás Maduro earlier this year. More than 40 people have died during a wave of protests by students and members of the Venezuelan opposition against curbs on democratic liberties, rampant crime and a deteriorating economy in the embattled Caribbean nation . More On […]

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U.S. oil imports from Nicolas Maduro’s Venezuela up the same week the U.S. Senate passes legislation sanctioning officials in Caracas for human rights abuses. UPI Photo/Mohammad Kheirkhah The U.S. Energy Information Administration said in a status report the United States imported 896,000 barrels of Venezuelan crude oil per day for the week ending Dec. 5, up 66 percent from last week and 14.4 percent year-on-year. The increase in oil imports comes more than two months after the Venezuelan government shelved plans to sell Citgo , the U.S. subsidiary of state oil company Petroleos de Venezuela . A decline in global oil prices is hurting economies like Venezuela’s that rely heavily on oil exports for revenue. High inflation in the country is eroding consumer purchasing power by as much as 12 percent. In July, the government in Caracas said it could free up export volumes and to start directing oil […]

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By Ezequiel Minaya KINGSTON, Jamaica–Some Caribbean and Central American countries are bracing for cutbacks in shipments of cut-rate oil from Venezuela, as Caracas struggles with sliding crude prices and a spiraling economic crisis. For a decade, the 13 beneficiaries of Venezuela’s largess have depended deeply on the oil to finance social spending and infrastructure, and rewarded Caracas with diplomatic support on the international stage, regional diplomats said in interviews. Even as Venezuela pledges to continue the program, the country’s oil exports to the countries fell about 20% through October compared with the same period last year, says ClipperData LLC, a New York data tracker. And last year, Venezuela’s cut-rate oil exports declined 15% from 2012, the International Monetary Fund says. Several participants in the program, called Petrocaribe, are preparing for further declines, which diplomats said stand to upend spending plans and tip some economies into recession. "If Petrocaribe pulls […]

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When Angel Fernandez, a former production engineer with Venezuela ’s state-owned petroleum company, relocated to Canada’s oil-sands region, it wasn’t for the weather. The draw was a paycheck that he said can stretch as much as 100 times further. “It’s been very difficult adjusting to temperatures” that typically max out at -10 degrees Celsius (14 degrees Fahrenheit), Fernandez said in an interview. “But for the opportunity, it’s worth it.” Fernandez, 33, is part of a growing exodus of skilled oilfield workers from Venezuela, where real wages for engineers have fallen to the equivalent of less than $400 a month, about 9 percent of the global average. The world’s worst inflation , swelling crime rates and a plunging currency are prompting others to move abroad, dragging down oil production at a time when slumping crude prices threaten the country’s export revenue. While Venezuela’s foreign affairs ministry has declined to provide […]

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Italian energy company Eni reviewing global oil market conditions with its counterparts in Venezuela. (UPI/Shutterstock/num_skyman) CARACAS, Venezuela, Dec. 3 (UPI) — While providing few specifics, Italian energy company Eni said Wednesday it was reviewing current world oil market conditions with its Venezuelan counterparts. Eni Chief Executive Officer Claudio Descalzi met in Caracas with his counterpart at Petroleos de Venezuela , Eulogio Del Pino. Both sides, the Italian company said, discussed developments at the Junin-5 and Perla oil fields, two of the largest oil fields discovered in recent years. Junin-5, located in Venezuela’s offshore Orinoco oil belt, is expected to produce about 240,000 barrels of oil per day at its maximum. The Perla field holds an estimated 17 trillion cubic feet of natural gas. "The meeting was also an opportunity to analyze the global energy scenario especially in light of the recent events that have heavily affected the world oil […]

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As Venezuelan Foreign Minister Rafael Ramirez urged fellow OPEC members to cut oil production at one point during last week’s three-hour meeting in Vienna, the split in the group quickly became clear. Eight countries — including those from Angola and Nigeria, which are, like Venezuela, among the hardest hit by the five-month rout in crude prices — embraced a reduction, according to five people briefed on the meeting. Absent from that list, though, was the most important man in the room, Saudi Arabian Oil Minister Ali Al-Naimi , who led a group of four Persian Gulf nations in voicing dissent, the people said. And with that, the push for a cut, which would require unanimous backing, was shot down, leaving OPEC’s daily output target at 30 million barrels and triggering a 10 percent collapse in prices by the next day. The disagreement cements the formation of two camps that […]

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VLADIMIR PUTIN pointed out that the Russian currency’s recent loss of value had a silver lining. “ We earlier sold a product worth $1 and got 32 rubles for it,” he told the TASS news agency. “And now we get 45 rubles for the same product costing $1. Budget revenues have increased and not decreased.” That simple math works for big energy producers like Russia, where government revenues come mostly from sales of oil and gas for dollars. When world energy prices drop, a depreciating currency can allow a government to keep spending at home and cushion the shock. Not everyone gets it, however. Unfortunately for Venezuelans, Mr. Putin’s lesson is lost on their own leaders, who are continuing to preside over an accelerating — and dangerous — economic collapse in one of the world’s biggest petroleum powers. The price of Venezuela’s heavy oil dropped below $70 a barrel […]

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By Kejal Vyas CARACAS–Venezuelan President Nicolás Maduro announced plans on Friday to cut public spending, beginning with his own salary, as the price of oil continues its slump. The slide in crude prices of more than 30% since the summer has added a new layer of concern for Mr. Maduro, whose popularity, polls show, has dropped to a record low. The South American country is struggling with soaring inflation as well as a dollar crunch that has led to shortages of food and consumer goods. Venezuela’s basket of heavy crude and petroleum products tumbled 89 cents to end the week at $68.08 a barrel, the lowest in more than four years, the oil ministry reported. "I don’t take this blow from the drop in oil prices badly," Mr. Maduro said in a televised address to industry workers at the Miraflores presidential palace. "I take it as an opportunity to […]

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