• 4 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 7 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 11 minutes Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
  • 14 minutes Wonders of Shale- Gas,bringing investments and jobs to the US
  • 5 hours Trump needs to educate US companies and citizens on Chinese Communist Party and People's Liberation Army. This is real ECONOMIC WARFARE. To understand Chinese warfare read General Sun Tzu's "Art of War" . . . written 500 B.C.
  • 5 hours Evil Awakens: Fascist Symbols And Rhetoric On Rise In Italian EU Vote
  • 1 hour Level-Headed Analysis of the Future of U.S. Shale Oil Industry
  • 4 hours Apartheid Is Still There: Post-apartheid South Africa Is World’s Most Unequal Country
  • 7 hours Is $60/Bbl WTI still considered a break even for Shale Oil
  • 9 hours Asia Oil Refiners Mull Run Cuts With Margins At 16 yrs. Low For Season
  • 9 hours IMO2020 To scrub or not to scrub
  • 9 hours IMO 2020 could create fierce competition for scarce water resources
  • 8 hours Trump bogged down in Mideast quagmire. US spent $Trillions, lost Thousands of lives, and lost goodwill. FOR WHAT? US interests ? WHAT INTEREST ? . . . . China greatest threat next 50 years.
  • 2 hours Apple Boycott in China
  • 4 hours Prosecutors Fine Bosch 90 Million Euros For Emissions Cheating Role
  • 8 hours Misunderstanding between USA and Iran the cause of current stand off, I call BS
  • 8 hours Why is Strait of Hormuz the World's Most Important Oil Artery
Alt Text

Oil Markets In Limbo After OPEC+ Meeting

Oil markets remain uncertain as…

Alt Text

Saudi Arabia Strikes Back In Yemen

Saudi Arabia has launched an…

Joe Weisenthal

Joe Weisenthal

Joe is a writer for Business Insider.

More Info

Trending Discussions

Despite High Oil Prices Venezuela Falling Further into Debt

Petro-dictatorships typically boom and bust with the price of oil, so you'd think that Venezuela would be riding high right now.

But a new report from Morgan Stanley presents a picture of a country that's actually falling further and further into debt, while running low on hard dollars.

The firm doesn't see an imminent credit "event" but it's not good.

There seem to be two main explanations for the apparent shortage of hard currency. One version – put forward by the authorities – is that Venezuela is embarking on a significant upgrade of its oil complex and needs major investment, especially in developing the Orinoco belt fields. However, there has been a conspicuous absence of news of major new oil investment on the ground from either official sources or the private companies operating in Venezuela. Most news accounts have focused on announcements of planned investments or signing ceremonies. Indeed, inward foreign direct investment that would be necessary to develop the Orinoco belt does not appear to have materialised. Instead, FDI has seen almost uninterrupted outflows since 3Q08 (see Exhibit 3).

Venezuela: Inward FDI
Image: Morgan Stanley: Paolo Batori

So if oil investment spending isn't the problem, what it?

Basically, bad economic polices:

There is an alternative explanation for why Venezuela appears to be short of hard currency cash: policy heterodoxy has hurt domestic supply, forcing an increase in imports as a substitute. Policy heterodoxy – especially the expropriations, lack of property rights and rising participation of the state in the production and distribution process – have led to a structural decline in Venezuelan production capacity, forcing a greater dependence on imports to satisfy demand. In turn, Venezuela’s reliance on imports means that it must generate enough dollars to finance those imports. Indeed, we suspect that the fundamental trade-off faced by Venezuelan policy-makers appears to be between economic growth and the health of external accounts.

By. Joe Weisenthal




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News