Venezuelaâs Oil industry is in shackles over the U.S. sanctions on state-owned PDVSA from exporting its crude. The Sanctions were imposed by U.S. President Donald Trump to curb the dictatorship of Venezuelaâs president Nicolas Maduro, which the U.S believes is being used by the state oil companies to transfer the wealth from the people of Venezuela to the Plutocracy of the country.
The U.S President Donald Trump supports the opposition leader Juan Guido to overthrow the dictatorship of Venezuelan president Nicolas Maduro.
As per the opposition leaders and U.S. President, Venezuela is facing an economic crisis because of the self-centred motivation of the countryâs president.
In the recent status quo, the U.S. president banned the Venezuela cryptocurrency Petro, which was backed by oil, gold, and diamond and according to Nicolas Maduro was issued to surpass the U.S. sanctions and uplift the economy.
On account of various such factors, the crude export from Venezuela took a major jab and exports from Venezuela dropped to 920,000 barrels per day.
As per the U.S. Energy Information Administration, Venezuela exported an average of 1.5million barrels per day of crude in 2017, down by 10% as compared to 2016. In the first quarter of 2018, exports of Venezuela stood at 1.1 million barrels per day.
The recent fall which marked a level of 920,000 barrels per day was significantly down as compared to the export range of 1.5 million to 1.66 million. Venezuela Crude oil export to the United States of America has dropped from 840,000 barrels per day in December 2015 to about 480,000 barrels per day in March â 2018.
The crude exportâs drastic fall has jolted the Venezuela oil industry. This has further supported the crude oil prices, with benchmark Brent crude oil futures hovering around $67 near its previous three months high of $67.72. The fall in U.S. weekly crude inventory level is also supporting the crude oil prices.
The Weekly crude inventory reported at -8.6M on 27th February 2019 as compared to its previous level of 3.7M on 21st February 2019. The supply concerns along with the optimism over the global economy is providing an impetus for crude prices.
The cut in crude export along with a decline in production in Venezuela can further lead the economy to epidemic starvation in the country as Venezuela economy highly depends on crude. As per Nicolas Maduro, he has arranged a food and medicine supply from Russia and said that the Russian Government is willing to help the nation. However, out of 300 metric tonnes of aid, which was initially promised by Russia, as per Maduro, only about 7.5 tonnes have arrived so far, according to the BBC news.
The tug of war between the current president Nicolas Maduro and opposition Leader Juan Guido is still underway, and in the recent event, Guido who is out of the country promises to come back despite continuous threats from the police.
The fall in export of crude along with the production will keep an inundated pressure on the Venezuela economy. However, the high export sign to Asia can bring respite sign to the state-owned PDVSA. On the market side, the falling supply due to Venezuela export decline and respite in swelling U.S. Shale inventory is supporting the crude oil prices.
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