Venezuela is once again finding itself in the dark in another massive power outage, according to Aljazeera, weighing further on the South American country that is struggling to maintain its oil output and oil exports amid US sanctions.
Venezuela, in dire need of its oil revenues that are withering on the vine, may be home to the world’s largest oil reserves, but the Maduro regime is likely finding that fact of little consolation these days.
The most recent blackout marks the second such widespread blacking in less than a month and even reached the capital city and covering more than half of Venezuela’s 23 states, according to Time, who was citing social media outlets.
Just two weeks ago, Venezuela suffered a catastrophic blackout that jeopardized the country’s oil production and exports, shutting down its main oil export terminal and its heavy crude processing complex in Jose. These operations affected its minority partners in the projects as well, including Chevron, Rosneft, Total, and Equinor, in what was thought to take offline as much as 450,000 bpd.
This time around, Venezuela’s oil operations once again could be further jeopardized, although the Maduro regime is claiming that many areas have since had power restored.
While Maduro points the finger once again at the United States for causing the outage, the White House has denied responsibility. Tensions between the two nations are high as the United States continues to crack down on sanctions, and Venezuela’s oil exports to the United States hit zero a couple weeks ago.
Tensions between the United States and Russia over Venezuela are also increasing, escalating over the weekend when two Russian planes with 100 troops landed in Venezuela, according to Reuters. The United States was quick to condemn what it felt was an encroachment in South America, while Russia downplayed the incident, hinting that it had routine military contracts to fulfill at the time.
This week’s blackout will no doubt impact oil production and exports further, with OPEC likely using the production loss as a win in its drive to lower global oil inventories to see higher prices.
By Julianne Geiger for Oilprice.com
More Top Reads From Oilprice.com:
- China’s Mad Scramble To Boost Domestic Oil Production
- Sources: Saudis Admit They Want $70 Oil
- Trump’s Last Chance To Subdue Gasoline Prices
Doesn't look good for oil production. The whole country seems kind of jinxed and turned upside down. We've got enough unrest and turmoil in the world, as it is. We need to work for less conflict, along with the right kinds of energy on this planet.
Looks like some conspiracy tales are actually taking place. See https://www.reuters.com/investigates/special-report/venezuela-russia-rosneft/
It looks like the Venezuelan opposition led by Juan Guaidó is cutting its nose to spite its face. They are prepared to destroy their country in order to get rid of the legally-elected President Nicholas Maduro.
And despite denial by the White House, the finger points again at the United States or its accomplices for causing the outage. How could the United States deny its involvement when it didn’t even bother to camouflage its involvement in this coup. John Bolton President Trump’s national security adviser openly urged Venezuelan military officers to back opposition leader Juan Guaidó or suffer the consequences.
He even went on national TV to say that “the sanctions will make a big difference to the United States economically if we could have American oil companies really invest in and produce the oil capabilities in Venezuela. It would be good for the people of Venezuela. It would be good for the people of the United States. We both have a lot at stake here making this come out the right way. A decimated oil industry in the nation with the largest proven oil reserves in the world would appear to serve some alternative interests beyond democracy and human rights.”
However, Venezuela has managed to redirect the 500,000 barrels a day (b/d) it used to export to the United States to China, India and the European Union without any loss to the global oil supply. China has been buying big volumes of Venezuelan oil estimated at 531,000 b/d. China of course wants to secure as much of cheap supplies as possible, especially from those who are friends with it such as Venezuela and Iran.
The only way out of this crisis and the misery inflicted on the Venezuelan people is for the United States to stop meddling in Venezuela’s affairs and for free elections to take place so as to give a clear and loud voice to the Venezuelan people.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London