The nation of Venezuela sits on some of the richest crude oil deposits on the planet and was, at one time, one of the chief exporters of a host of related products. They are the only member of OPEC in the Americas. So how is it that they are once again putting out calls looking to purchase crude oil from the United States? If you’ve been paying any attention at all to current events in the imploding socialist nation you likely already know the answer. They’ve run their energy production capability into the ground through an endless stream of mismanagement and corruption. They no longer produce enough crude to keep their refineries operating at anywhere near capacity, so the dictator who previously tried to blame Donald Trump for the collapse of his nation’s economy and prosperity is now coming to us hat in hand. (Oil Price)
Struggling Venezuelan state oil company PDVSA has launched tenders to purchase a total 4.2 million barrels of U.S. and Russian crude oil, which includes up to 3 million barrels of U.S. light sweet and 1.2 million barrels of Russian Urals, Reuters reports citing tender documents.
One tender is for five cargoes, 600,000 barrels each, of WTI or DSW crude blends. According to the documents, the company would also consider taking it in alternate increments of two 1-million-barrel cargoes of U.S. crude, plus another 600,000-barrel shipment.
The other tender is for two cargoes of 600,000 barrels of Urals crude each, both for January delivery. The crude will be processed at Venezuela’s Isla refinery, which has a capacity of 335,000 bpd, but Isla has been working at reduced utilization rates because of a shortage of light crude.
Russia will likely make a delivery, assuming they have enough to spare. But Maduro has no assurance that he’ll get the oil from us for a couple of reasons. One is the set of United States sanctions against him which are still in place with more being considered. The other is the fact that someone will have to be willing to take the chance and extend credit to Venezuela, a country which currently has currency that’s worth more as wallpaper than actual cash. Anyone arranging such a deal may be waiting a very long time to get paid, assuming they ever do.
As Oil Price reports, there’s currently a bit of a traffic jam at Venezuela’s ports, with tankers waiting to take care of their business. Empty vessels awaiting exports aren’t receiving enough product to transport. At the other end of the supply chain, ten tankers full of crude are sitting offshore awaiting orders to unload which have not come because the sellers are not being paid. The system is nearly shut down.
And this is all because the socialist government there has run their oil business into the ground. (Pun intended.) Profits were stolen and money for maintenance and labor costs was insufficient to keep production rolling. The current crude oil output from Venezuela is at historic lows and they’re sitting at 13% capacity utilization in their refineries.
Meanwhile, I know you’ve heard us speaking about the “starving Venezuelans” protesting in the streets, but now that’s literally become their reality. And starvation is killing off a shocking number of their children. (NY Times)
Hunger has stalked Venezuela for years. Now, it is killing the nation’s children at an alarming rate, doctors in the country’s public hospitals say.
Venezuela has been shuddering since its economy began to collapse in 2014. Riots and protests over the lack of affordable food, excruciating long lines for basic provisions, soldiers posted outside bakeries and angry crowds ransacking grocery stores have rattled cities, providing a telling, public display of the depths of the crisis.
But deaths from malnutrition have remained a closely guarded secret by the Venezuelan government. In a five-month investigation by The New York Times, doctors at 21 public hospitals in 17 states across the country said that their emergency rooms were being overwhelmed by children with severe malnutrition — a condition they had rarely encountered before the economic crisis began.
Go read that article if your stomach can handle it. Young children are being buried in hand-dug graves, their emaciated bodies being tended to pro bono by caring funeral home owners. Those who can manage to get something to eat are dying off from wholly preventable and/or curable diseases because of the paucity of available medicine and vaccines. These are the wages of a dictatorship. And, for the umpteenth time, I would like to remind our younger readers in particular… This Is How Socialism Always Ends. It’s happened for centuries and it’s happening again before our eyes in Venezuela. Do not be lured by this false siren.