True to his ‘anti-imperialistic’ rhetoric, Venezuela’s embattled President Nicolas Maduro now says that his country could stop selling its crude oil to the United States.
“The day that they don’t want us to sell them our oil, we are just picking up our stuff [and] we’ll sell all our oil in Asia. No big deal,” AFP quoted Maduro as saying on Tuesday, while he was formally installing General Manuel Quevedo to lead debt-stricken state oil producer PDVSA.
According to OPEC’s secondary sources, Venezuela’s crude oil production was 1.863 million bpd in October, down by 43,600 bpd from September. While Venezuela has been desperately trying to stave off what most see as an inevitable default, its production has been progressively dropping every month this year. U.S. imports of crude oil from Venezuela have also been dropping in recent weeks, according to EIA data—in many weeks to below 500,000 bpd from some 700,000-800,000 bpd earlier this year. In January and February 2017, shipments to the US even topped 1 million bpd.
“Mr President Donald Trump: you decide, dude,” Maduro said, as quoted by AFP.
“If you want us to keep selling oil, we’ll sell oil. But if you start listening to far-right extremists, Venezuela is grabbing its little boats and taking its oil around the world, and we’ll sell it just the very same,” Maduro said. Related: U.S. Oil Has One Fatal Weakness
At the end of August, the U.S. stepped up its sanctions on Venezuela, prohibiting dealings in new debt or equity issued by PDVSA or the government. Maduro claims that the string of U.S. sanctions imposed this year on Venezuela amount to “financial persecution”.
In a surprise move over the weekend, Maduro named a National Guard major general as the new head of PDVSA and the country’s oil ministry— Manuel Quevedo.
Quevedo vowed on Tuesday to end corruption at PDVSA, but didn’t mention how he would approach the company’s huge foreign debt. Analysts and bond investors will be closely following Quevedo’s statements and moves to try to figure if the new chief will continue Maduro’s policy to try to service debt at all costs—even if payments are late—despite cash reserves quickly running out.
By Tsvetana Paraskova for Oilprice.com
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Selling oil to Asia is like selling heroin to a junkie.