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Oil Prices Could Fall Another 20%

Oil Prices Could Fall Another 20%

Oil prices have tumbled as…

U.S. Hits Venezuela With New Sanctions And More Still On Table

Sanctions

Vice President Mike Pence announced that the United States will add 34 PDVSA owned or operated vessels to the sanctions list on Friday, according to Reuters. The announcement came during the Vice President’s Friday Venezuela-focused speech at Rice University’s Baker Institute of Public Policy in Houston—an invitation-only event.

The sanctions not only target the 34 PDVSA vessels but also two firms that transport Venezuela crude oil to neighboring Cuba, Pence said, adding that this may not be the final thing added to the sanctions, as the US mulls even more sanctions, this time targeting the financial sector.

The event on Friday at Rice likely met with a captive audience, as Houston is home to a very large Venezuelan population in its Katy suburb dubbed Katyzuela. Naturally, many Venezuelan’s fleeing their homeland had served in its oil business, and Houston had much to offer along that line of the work.

The US originally levied sanctions against Venezuela to get Nicolas Maduro to step down. The United States and many other nations have since recognized Maduro’s opposition, Juan Guaido, as the legitimate president of Venezuela.

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Maduro has yet to succumb to international pressure even as its financial means come up short. Maduro has responded only by cracking down on his opposition, first by slapping him with a travel ban, second from holding public office, and most recently stripping him of his parliamentary immunity. Guaido and Maduro both remain undeterred by the external pressures placed on them.

Venezuela’s oil industry, on the other hand, has proven less resilient. Venezuela’s crude oil production has taken quite a hit, with March’s production dropping to 740,000 barrels per day—a 16 year low—according to an S&P Platts survey published on Friday.

A flurry of blackouts has also wreaked havoc in its oil industry—responsible for 90% of its revenues—and oil exports are expected to fall even further this month.

By Julianne Geiger for Oilprice.com

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  • Steven Conn on April 06 2019 said:
    This of course shows that previous sanctions failed to force a coup in Venezuela. China, India, a few EU states, and Russian oil companies continued to buy, trade, hip Venezuelan oil. Much like with Iran, Washington's sanctions are an exercise in futility. This is why the current regime is turning to sabotage of Venezuelan civilian infrastructure (power stations, pipelines, oil terminals), which have proven more effective than its sanctions.

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