OPINIONS

Date: 15 November 2022 Author: Kacper Gatlik

Oil Exports Rise in Venezuela

An increase in oil exports in September 2022 from Venezuela to China, Cuba, and Europe, among others, is expected to boost revenues for this Bolivarian country. This, however, does not improve Venezuela’s current social and economic situation. The 2020 sanctions imposed on this country by Western and Latin American countries have limited Venezuelan oil exports to global oil trade markets. The public receives food rations from the state, and the consumer market is still constrained due to the enforced sanctions.

SOURCE: Wikimedia Commons (Pasztilla aka Attila Terbócs)

The crisis following Venezuela’s presidential election in 2018[1] has divided international public opinion. 50 countries now support Juan Guaidó[2], who has been recognized as the legitimate president of Venezuela by the United Nations. 20 countries, including Russia, China, Iran, and Cuba, are in favor of the current president, Nicolás Maduro. In 2018, the European Union backed President Guaidó, but as of 2022, it is not in favor of either candidate. The United States, through its cooperation within the Organization of American States (OAS), has contributed to Latin American countries imposing sanctions on President Maduro’s regime.

The lack of legitimacy of President Maduro does not hinder the Bolivarian Republic from maintaining business relations with its international partners. In September 2022, oil extraction and exports grew proportionally to previous months. In one of its reports, Reuters highlights an improvement in Venezuelan oil exports compared to August 2021¾a positive sign for the country’s energy security for the months ahead[3].

In August 2022, Venezuela’s private and state-owned oil companies produced 723,000 barrels of oil per day. In July, the production amounted to 629 barrels per day[4]. This is a 37 percent increase over July 2022. The U.S. government’s Energy Information Administration (EIA) monitors energy in the Bolivarian Republic of Venezuela and publishes statistics showing the country’s energy balance. In 2019, its electricity consumption amounted to 57.8 TWh[5], and the total primary energy supply for the same year reached 33.11 metric tons of oil equivalent (Mtoe)[6].

In Venezuela, most electricity is produced by hydroelectric power plants. In contrast, the renewable energy branch is not being developed due to the political situation and corruption prevailing among Venezuela’s authorities. In 2019, this renewable energy production reached 49,000 GWh[7]. One of the power plants located at the Guri dam in the Bolívar State currently provides 50 to 70 percent of the electricity for all of Venezuela[8]. Natural gas energy production in 2019 amounted to 21 thousand GWh, while that from oil ranks third in Venezuela’s energy mix, reaching only 14 thousand GWh in 2019[9]. Due to the political crisis that began after the December 2015 parliamentary elections, there has been a decline in energy production in three sectors: gas, oil, and hydropower[10].

At that time, the United Socialist Party of Venezuela lost the parliamentary elections against the Democratic Unity Coalition. The Socialists lost power after 16 years, and the country, ruled by the former opposition, plunged into another economic, social, and political crisis. Hyperinflation emerged, reaching a threshold of 65,000 percent in 2018, and the new government blackmailed, and persecuted communist activists and political forces linked to the previous ruling party. This had an impact on the Venezuelan people as far as energy is concerned. In March 2019, more than a dozen Bolivarian states in Venezuela lacked electricity, and the capital Caracas lost power several times, leaving critical infrastructure, including hospitals and roads, unlit. As many as 43 people died between March 7 and 14, 2019 as a result.

In 2020, Maduro’s socialists won the parliamentary elections, which were boycotted by the opposition[11]. The deepening centralization of power and media censorship limit access to reliable information for Venezuelan citizens. Energy is not a priority for those in power in Caracas. Due to temporary power outages, the Venezuelan public does not use electricity as much as people in the United States or Western Europe. Failure to take responsibility for the underfunding of Venezuela’s energy sector, corruption, as well as blackmail of political opponents result in power outages and disable the country’s operations through repeated blackouts.

[1]Bullock, Penn (10 January 2019). Climate Change, U.S. Shutdown, Michael Cohen: Your Friday Briefing. New York Times (Online) – via ProQuest. President Nicolás Maduro was inaugurated for a second term after an election last year that was widely considered illegitimate—despite a plummeting economy and skyrocketing violence, hunger, and migration.

[2] Socio-economic and political crisis in Venezuela, https://www.consilium.europa.eu/en/policies/venezuela/.

[3]Fuel oil, byproducts boosted Venezuela’s oil exports in Aug, https://www.reuters.com/business/energy/fuel-oil-byproducts-boosted-venezuelas-oil-exports-aug-2022-09-02/.

[4] Venezuela Crude Oil Production, https://tradingeconomics.com/venezuela/crude-oil-production.

[5]Venezuela, Key energy statistics, 2019: https://www.iea.org/countries/venezuela.

[6]Ibid.

[7] Ibid.

[8] The Guri Hydroelectric Power Plant Project, Venezuela.

[9] Venezuela, Key energy statistics…

[10] Od bogactwa do katastrofy. Wenezuela na dnie po latach rządów skrajnej lewicy: https://www.money.pl/gospodarka/od-bogactwa-do-katastrofy-wenezuela-na-dnie-po-latach-rzadow-skrajnej-lewicy-6342284995020929a.html.

[11] Pozzebon, Stefano (December 7, 2020). PSUV gana las elecciones legislativas boicoteadas por la oposición, anuncia el CNE. CNN. Retrieved September 2, 2021.

 

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