Tanker Sabotage: Venezuela’s Crisis Worsens

Tankers carrying gasoline and ships transporting food for Venezuela were sabotaged last week to prevent them from reaching Venezuela, Nicolas Maduro said in a televised speech late on Monday.

“Last week, sabotage was committed against ten tankers [with gasoline] to prevent them from reaching the Venezuelan coast,” Russian news outlet Sputnik quoted Maduro as saying.

Amid political chaos and a raging economic crisis, Venezuela’s oil production has been crumbling, and most refineries and upgraders have stopped producing entirely, operating at zero capacity merely to keep the facilities from being damaged as its buyers look for alternate supplies in the face of US sanctions.

Venezuela, the country sitting on top of the world’s largest crude oil reserves, is now producing less than 1 million bpd of oil - just over 750,000 bpd in April, compared to average production of 1.9 million bpd for 2017, as per OPEC’s secondary sources.

While Maduro and opposition leader Juan Guaidó, recognized as the country’s interim president by the U.S. and many other countries, vie for Venezuela’s presidency, the tightened U.S. sanctions on Venezuela that began in February are constraining Venezuela’s ability to produce, refine, and export oil. Venezuela’s gasoline production has slumped as the second-largest refinery in the country stopped operating, and gasoline import shortages have caused lines at gas stations.

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The military is overseeing the rationing of fuel while shortages begin to bite deeper as crude oil production continues to fall, refineries idle, and the flow of diluents necessary to produce fuels from Venezuelan superheavy crude dries up.

Meanwhile, Norway’s government said on Saturday that representatives for Maduro and Guaidó would hold another round of talks mediated by Norway.

“We announce that the representatives of the main political actors in Venezuela have decided to return to Oslo next week to continue a process facilitated by Norway,” the Norwegian government said on May 25.

“We reiterate our commitment to continue supporting the search for an agreed-upon solution between the parties in Venezuela,” Norway said.

By Tsvetana Paraskova for Oilprice.com

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