The United States is making many efforts to reduce the price of oil in the world market. As part of that, sanctions on Venezuela have been lifted. But the Economist reports that Venezuela’s arrival on the market is unlikely to have a major impact on supply and prices.
Venezuela’s state company PDVSA has very little production. It is not possible to increase the production of these state-owned companies in the short term, especially when the initial period of lifting the ban is only six months.
PDVSA now produces a fifth of the oil it produced before Hugo Chavez came to power. The company has not been invested for a long time and the situation is dire due to bad management. But in the 1980s and 1990s, this company was one of the most productive oil companies in the world.
Nicolás Maduro doesn’t care about these things. In staying in power for over a decade, he has shown uncanny ability. He now needs to raise support and cash for the 2024 elections. Achieving the goal becomes easier if the economy is de-sanctioned and the country’s main exports double in value. For that he agreed to the Barbados Treaty.
