Foreign Policy: Venezuela Is So Broke It Can’t Even Export Oil
Fleet of rundown Venezuelan oil tankers carrying some 4 million barrels of oil and other fuels are wallowing in the Caribbean Sea. Not because of bad weather or mechanical problems, but because Venezuela’s state-owned oil company, Petróleos de Venezuela SA, doesn’t have the cash to get them to their final destinations.
Beyond the obvious environmental risks, it’s doubly bad news for Venezuela, a country in dire economic straits and full-fledged crisis, with a political impasse, looting, dangerous food and health supply shortages, and massive protests. Venezuela is massively reliant on oil exports to bankroll government services. But the cash-strapped country can’t even find the money to service the vessels that carry its exports. And Venezuela needs the exports to get the cash to service the vessels. It’s a vicious circle.
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Update #1: Exclusive: Millions of barrels of Venezuelan oil stuck at sea in dirty tankers (Reuters)
Update #2: Venezuela’s PDVSA Can’t Afford To Clean Tankers, Pay Shipping Bills (Oil Price)
WNU Editor: This has been a recurring problem. Oil tankers are in limbo as Venezuela’s PDVSA fails to pay BP, according to sources (Reuters). I have a distant relative who works in the oil industry in Alberta. He follows the oil situation in Venezuela very closely and has been there in the past. I will never forget what he told me last year: “Venezuela’s oil infrastructure has broken down to the point where it will cease to be a player in the oil industry in about 3–5 years”. But if the above Foreign Policy article is accurate, it looks like my relative is wrong. It is breaking down now.
