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Breaking News:

OPEC Lifts Production in February

Mexico Is Prepared To Sell Venezuelan Oil

Mexico is ready to sell crude oil to Venezuela should it need it, President Andres Manuel Lopez Obrador said, as quoted by Latin American media during his regular Monday press conference.

“If they requested it and it was a humanitarian necessity, we would do it (...) No one has the right to oppress others,” Lopez Obrador said, adding that "Mexico is an independent, sovereign country, we make our own decisions and we do not interfere with the other countries' policies. It is people's self-determination,"

Argus Media noted that Lope Obrador had made clear Venezuela had not extended such a request at this time. However, the media reported, a Caracas official had said the request would be made soon.

As sovereign as it is, Mexican companies could still face U.S. sanction action if they try to trade with Venezuela. Washington has bee tightening the sanction noose around Caracas lately, especially after the first of five Iranian tankers carrying fuel for Venezuela arrived at the country.

What’s more, as Argus Media points out, Mexico itself imports most of the gasoline it consumes, which suggests the consequences of any help for Venezuela—with U.S. gasoline, no less—could aggravate relations with Mexico’s northern neighbor.

Venezuela is in the grips of a major gasoline shortage as refineries are unable to operate at run rates higher than 10 percent because of a shortage of diluents necessary for the production of fuels as well as an urgent need for repairs.

Soon after the start of tanker arrivals, Washington announced plans to blacklist tanker owners and users of vessels that had travelled to Venezuela over the past 12 months. Already, media reported, some tankers sailing for Venezuela had turned around.

According to a ship brokerage there were as many as 77 tankers that have called at Venezuelan ports over the past 12 months, which puts them at risk of being blacklisted.


By Irina Slav for Oilprice.com

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  • Mamdouh Salameh on June 16 2020 said:
    Mexico is already joining a widening circle of countries who are prepared to defy US sanctions on Venezuela and deal with the South American country.

    The United States accounts for less than 15% of the global economy and this is projected to decline to 13.86% by 2024 and yet it behaves as if it owns the world imposing sanctions on any country which doesn’t kowtow to it.

    However, soon US sanctions will become a thing of the past with the petrodollar eventually losing its status as the oil currency of the world to the petro-yuan.

    With the petro-yuan a reality now, major oil exporters are finally having a viable way to circumvent the petrodollar system. Undermine the petrodollar, and you undermine not only the US sanctions regime but also the US financial system and the US economy. That is exactly what China is doing right now.

    The COVID-19 pandemic may have hastened the day when the dollar will crash. The pandemic and the economic crisis it has triggered have sent US budget deficit soaring to a peacetime record of 17.9% of gross domestic product in 2020. The dollar will not be spared under these circumstances. The key question is what will spark the decline?

    Look no further than the Trump administration. Its protectionist trade policies, its withdrawal from the Paris Agreement on Climate, the Iran nuclear deal, Trans-Pacific Partnership, World Health Organization, traditional Atlantic alliances, its gross mismanagement of Covid-19 pandemic, its threat to impose sanctions on an ally like Germany because of its firm stand on the Nord Stream gas pipeline and Angela Merkel's refusal of the President Trump invitation to come to Washington DC together with spreading racial turmoil not seen since the late 1960s, are all painfully visible manifestations of America’s sharply diminished global leadership.

    These events along with plunging domestic savings could weaken the dollar by as much as 35%. Trump’s trade war with China raises questions as who will fund the soaring US deficit if China stopped buying US Treasury bills and at what terms?

    Like Covid-19 Pandemic, racial turmoil and the fall of the dollar will cast US global leadership in a very harsh light. The world is changing and the world order must be revamped. Pax Americana is virtually over and Washington must adjust to the new world.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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