A new report is warning that the socialist engineered economic crisis in Venezuela will completely kill the global oil market. Plunging oil production in Venezuela is causing a national economic and humanitarian crisis that could tip the global oil market “decisively into deficit,” according to the report.
Published Thursday, the report laid out concerns that Venezuela’s socialist regime could impact all of us globally. Although critics claim the experimentation with Venezuelan President Nicolas Maduro’s oil-backed cryptocurrency, the petro, is doomed to fail epically, Maduro claims it will help deliver “everything our country needs.”
Maduro claimed Wednesday the pre-sale of the digital coin had been a huge success, raising $5 billion from 83,000 investors in 127 countries. However, there is no evidence that he spoke in fact. A report from the Brookings thinktank harshly criticized the petro project, saying it would likely fail and in doing so would harm the legitimate use of cryptocurrencies in general, contributing “to the idea that cryptocurrencies facilitate fraud.”
What makes matters worse, is at the same time, Maduro appears to be ignoring warning signs about the socialist regime’s oil production. “Within the OPEC countries, the biggest risk factor is, and will likely remain Venezuela,” the International Energy Agency said in its closely-watched monthly report.
Along with the fact that the population is being starved and impoverished by government policies which spurred hyperinflation, Oil production in Venezuela has plummeted in the last two years, with the U.S. Energy Information Administration claiming production is 300,000 barrels a day less than in 2017. OPEC cut back oil production in recent years to boost the price of oil after 2014 collapse, but now the unplanned drop in Venezuela’s oil production could cause a shortage of oil.
“Without any compensatory change from other producers it is possible that the Latin American country could be the final element that tips the market decisively into deficit,” the report said.
Despite the worsening political crisis, Maduro has continued to brag about the petro, which he believes will help the country avoid crippling international sanctions. He told the members of the United Socialist Party of Venezuela last week that the money raised from the sale of the petro would form part of a wider “economic solution” and would strengthen the country’s “monetary sovereignty, to make financial transactions and overcome the financial blockade.”
Failure??? This is an example of the success of socialism.
Very good point !!! 🙂
Any lack of production by Venezuela and subsequent international market price rise will only provide US shale oil & gas an opportunity to increase production and fill the void of any artificial shortages created by Venezuela’s oil industry demise.
The US is determined now under TRUMP to become self sufficient in energy production and exploit all fossil fuel reserves while it is still possible to profit from them, before more exotic, alt energy sources become the primary source for power generation.
There’s a new Sheriff in town. 🙂
Venezuela has SH!T oil.
They have massive reserves of poor quality oil. Countries have actually demanded discounts because of such low quality or ended up cancelling future deliveries.
If Venezuela was the only oil source, gas prices would probably make it prohibitive.
Fortuntely for me,
My high school chemistry instructor
was a retired Shell Oil company
Chemist. We learned more than most
run of the mill chemistry classes.
I made several gallons of Rum in that class.
It was a cheap way to make alcohol, by-passing
Federal taxes.
Alcohol was used in great quantiles for the class,
qualitative analysis, Not for drinking!
What we learned was how to manipulate molecules.
The big question is “Can you do it profitably?”
There is no such thing as “bad” oil”.
BTW
I tried to withhold some alcohol from my Rum run.
The instructor knew to the milli-litre how much
I should have produced, and I had to hand it over.
Schools these days aren’t up to what I grew up with.
Way long ago my high school chemistry professor showed us how to make alcohol also. We actually cracked 180+ proof while making the high school wing smell something terrible. I followed up on the instructions by creating a still in my utility room at home. Stuff tasted terrible but had a good kick!!
Ah, the good old days.
Venezuela crude is “heavy” oil, meaning it has a high sulphur content and the only real refineries that process that crude in the world, are historically, located in the USA.
China is actually building a new refinery to process Venezuela’s high sulphur crude to prop up Maduro. China will either take the hit to profit by processing that oil (and make it up in volume), or Maduro’s Regime will fall. 🙂
Maduro is an idiot. Why bother with a crypto-currency being backed by his oil? Just declare the bolivar as having his nation’s oil being the material backing it. Hell, he could set a new petro-standard currency that way. If he played his cards right, he could pull the rug out from under the dollar and/or the BRICs along with getting his sh*thole of a country out of the mess it is in.
Not a chance in hell for that scenario as I have just explained, above, in two different posts. 🙂
Venezuela has decided to put a limit on the number of rats that the citizens can kill and eat. They don’t want fat,lazy workers .
The socialists have put no investments in their oil industry’s equipment, the oil workers are leaving the country(despite government punishments), and the quality of their oil is very low. If someone helped them to pump more oil, they would flood the market with their crude oil. If no one helps them, they are down the tubes. Sounds like a win-win situation!
Russia is not going to help them pump more oil as that would only undermine their own, major export after wheat.
China is using the crisis in Venezuela (as I have explained above) to extend their tentacles deeper into the Venezuela economy to sell their excess manufacturing capacity: read “dump”. 🙂
Who takes in more money than the oil companies on a daily basis? It should be 25 cents a gallon now with gas wars putting the price in the teens like it was before. It’s not worth anymore now than it was then. Who else can raise prices at this clip whenever they see fit? Big oil, big thieves.
Gas can’t go that low because of taxes. Almost 1/3 of what I pay for gas is the state and federal taxes.
Oil companies should be required to sell at 10 cents a gallon.
Power to the people!
Stop complaining, we pay SIX dollars a gallon in Australia!
How much is Taxes?
I normally subscribe to cost
of production and a after tax
10% profit.That seems fair
and is historical
precedent.
Most of my fuel cost is government
taxes.
I pay USD over $4 for my diesel. That would be
over $5 in your world. Most of
my fuel cost is taxes and regulations.
Rellik,
They are actually cheaper than us if you do the math on exchange rate.
You lost your mind… 10 cents… Oil companies have to make money or we don’t get it… They are in business to make a profit, not make you happy.
Gas on average is over $3/Gal here in WA state now. gone up .20 in the last few weeks.
If I remember correctly Venezuela has heavy oil. Not the most desirable and requires specialized refineries. USA needs to drill, drill, drill!
I can guarantee you that the globalists are doing everything they can to ensure that the crisis in Venezuela continues. It’s all part of their agenda.
Death to the New World Order.
” plunging oil production in Venezuela” The only reason it is plunging is socialist management not all the excuses they give,,, no other reasons. “could tip the global oil market in deficit”,,, I disagree,, 1 countries slowing production should have minimal effect unless the big oil dudes need a reason to claim shortage and raise prices. Now, here is what they are not mentioning, and I have a lot of time in and knowledge about Colombia. Next door to VEN is Colombia who is run by a right wing government. After 40+ years of war by commie guerillas, a new right wing pres was elected in 2002 who was willing to fight to win and hurt the commies bad, ultimately winning. Colombia has oil also, and starting after the rural areas became safer for the oil workers, began ramping up oil production which continues to this day. Every year Colombia pumps more and more oil which should help take the slack off the VEN plunging production. If anybody here is into oil stocks please check out Ecopetrol, symbol EC, which is a growing Colombian oil company. I own a few hundred shares. It fell with the oil crisis but lately has been recovering. Has been a very good stock for me as I bought when it fell just like the American oil majors fell during the oil crisis. On a slightly different note,, I would advise all those interested in foreign countries to check out Colombia, who still has the reputation of drugs and violence but really has a great economy and people. Medellin, where I lived also has near perfect climate year round, in the 70 or 80s every day and is truly a first world city as long as you stay out of the poor areas of which you have no reason to visit anyway. And if you are a single man its near heaven as the ladies are drop dead gorgeous and like ugly fat bald poor old gringoes like me. I have a sweetie 22 years younger than me and although latina, she is completely caucasion looking,, when she visits me here (fairly often for months at a time) no one even suspects she is anything other than a normal white american girl, at least until she speaks. Generally speaking, the middle and upper classes in Medellin are white looking or Italian looking, and the poor look like most of the mexicans we see in the USA. (same way in Mexico, depending on class, we dont see the white mexicans here). Sorry to get off subject.
Back to subject,,, commie VEN oil plunging, right wing next door COL oil growing.. That says it all!! KF
Way back in 1975 it was statedd that gasoline could be made from oil shale and sold to the public for 75 cents a gallon Besides that idea the US is currently an oil exporter We could have cheap gas here if it was handled right while the rest of the world can take a flying leap Why should the US be held hostage to the actions of a commie lunatic. Why do we put up with this crap Old lines commonly used in the past. Price of gasoline has to go up for the summer driving season. price o gasoline has to go up for the winter heating season. The public is a bunch of lennies Yah yah George anything you say
“OPEC cut back oil production in recent years to boost the price of oil after 2014 collapse”.
No they didn’t. OPEC has been pumping the hell out of oil to push prices down in an attempt to cripple the U.S. fracking program. To an extent, they were successful. Anyway, if OPEC really “cut back” then logically they could cancel that and increase production.
Venezuela has heavy, sour crude. It is the most expensive to refine save only Canadian oil sands. It is desired last and would have a very marginal effect on the world price. Probably zero given our capacity to ramp up production rapidly from the shut-in wells that have already been fracked.
The U.S. Energy Information Administration is a bunch of dumbass bureaucrats who couldn’t tell sheep shit from wild clover honey.
Oil prices are going lower, not higher.
I think prices will stabilize now at about $50-60 bbl. Demand should increase as the TRUMP Infrastructure Plan is initiated, because all of that construction and the rebirth of manufacturing in America will require more energy.
Shale oil is making a profit at that price (because the wells have already been drilled) and the Saudis cannot afford to lose any more money by trying to depress the price. They have capitulated to American interests because they need US to protect them from the Iran political & military threat; which is their biggest concern.
Saudi production is close to maximum and their fields are in decline. They need to optimize profit on their oil as they attempt to transition to a diversified economy. They basically failed in their attempt to neutralize American Shale Oil & Gas
As demand increases and prices rise a bit, more American Oil & Gas will be pumped and exported to Europe, Japan, and China. Sanctions on Iran and Russia are designed to suppress their world energy market share and the gaps are being filled by American companies and American oil & gas.
The fight for Syria is really about the future Israeli gas pipeline route to Europe. 🙂
Venezuela owes a lot of money to Russia and China. Rather than being stiffed, the Russians and Chinese are accepting the oil. Venezuela lacks the chemicals to properly refine the heavy crude. Even when they “sell” the oil, they don’t necessarily get the foreign capital to buy the needed chemicals. If you owe a little money, your debtors will hold your feet to the fire. If you own a whole lot of money, your debtors will work with you to find a solution. Sounds a little bit like the large US banks!