OPEC’s member Venezuela—which is sitting on the world’s largest crude oil reserves but which is suffering the worst loss of oil production in history outside of war-induced outages—is getting ready to share macroeconomic data with the International Monetary Fund to avoid penalties including possible exclusion from the IMF.
The central bank of Venezuela is preparing to hand over crucial economic statistics to the IMF to meet a November 30 deadline to provide the information or risk exclusion, two people with direct knowledge of the issue told Bloomberg on Thursday.
Venezuela hasn’t provided economic data to the IMF since 2016, when its crisis started to become severe. The IMF issued a declaration of censure against Venezuela in May this year because Venezuela failed to provide adequate data and implement remedial measures. In May, IMF’s Executive Board said that it would meet again within six months to consider Venezuela’s progress in providing data.
Just like its economy, oil production in the world’s largest holder of crude reserves is also in free fall. In October, Venezuela’s crude oil production plunged by another 40,000 bpd compared to September, to stand at just 1.171 million bpd, as per OPEC’s secondary sources. To compare, Venezuela’s oil production averaged 2.154 million bpd for 2016 and 1.911 million bpd for 2017.
Venezuela’s crude production could soon sink to below 1 million bpd, Fatih Birol, Executive Director of the International Energy Agency (IEA), warned last week, and it looks like it would be sooner rather than later.
The economic collapse adds to years of mismanagement and underinvestment in the oil industry to further complicate attempts in Venezuela, one of OPEC’s five founding members, to stop the steep decline of its oil production. Venezuelan people are fleeing the country en masse amid an aggravating humanitarian crisis and an extreme poverty rate of 40 percent.
According to the IMF, Venezuela’s economy will collapse by 18 percent this year, while inflation is expected to be at 1,370,000 percent.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.