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The United States may have added more sanctions on vessels carrying crude oil and other petroleum products from Venezuela earlier this week, but PDVSA—Venezuela’s state-run oil company—is still shipping crude oil and fuel to Cuba, Reuters sources and Eikon data reported on Wednesday.
Still, the sanctions have been effective, if not 100% so. While both the Maduro regime in Venezuela and Cuba have voiced their harsh criticism for the US sanctions and have vowed to defy those sanctions, both Cuba and Venezuela have suffered under the weight of those sanctions.
For Cuba, this suffering comes in the form of a significant fuel shortage—so much so that some sugar cane farmers in Cuba have resorted to plowing their fields with oxen. Like Maduro, Cuba’s President Miguel Diaz-Canel has tried to downplay the crisis, but the economic crisis in both countries is profound.
For Venezuela, the lack of oil revenue stemming both from the mismanagement of its entire oil industry and US sanctions, the economic crisis is possibly even more profound, and has experienced a rise in infectious diseases as a result. For a country that holds the world’s largest oil reserves, the disparity of what could be and what is is huge.
Venezuela has stopped almost all of its oil refineries completely, and their oil production has fallen to just 712,000 bpd, from almost 2 million bpd in 2017. What crude it has managed to produce is filling up storage tanks, and will soon need to be curbed even more as shippers are unwilling to move its oil from Venezuela to its very short list of buyers which include mostly just China and Cuba.
But even China has canceled its loadings of Venezuela crude for August, after Washington upped the ante by threatening to freeze assets of foreign firms with US assets.
Venezuela’s September loadings to Cuba so far total 119,000 bpd, Reuters said.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.