Venezuela Oil

In order to understand Venezuela’s current economic policies, it is important to examine the economic and political ideologies adopted by past leaders of the Bolivar state. Chavez, who was the president of Venezuela from 1993-2003, took a very anti-neoliberal approach towards the Venezuelan economy. Chavez had a strong distaste for western ideology and aimed to lessen the degree of influence that the IMF and the United States had over Venezuela; In fact, Chavez’s desire to distance Venezuela from western influence is arguably the main reason that led to Venezuela’s shift in its economic model and economic partnerships. Foreign investors from the United States planted themselves in Venezuela’s oil industry. As a result, the IMF and the United States financially benefitted where Venezuela could not. Realizing it was in a position of economic disadvantage, Venezuela distanced itself from the United States and the IMF while attempting to become more economically independent.

Venezuela’s reputation has been well established regarding its supply of oil and how it was being used for medicinal use and other purposes. It was not until the first oil well was drilled in 1912, when Venezuela became the world’s second largest oil producer behind the US, and the world’s largest oil exporter (Wilpert, 2003). With the well drill in the country it attracted many major oil producers that wanted a piece of anything they could get. The Royal Dutch Shell and Rockefeller’s Standard Oil became the main producers of the oil and maintained a high status. Everything was going great for the company, “ between 1920 and 1935 oil share’s exports went up from 1.9% to 91.2%”(Wilpert, 2003), but not everything goes according to plan. The country had a dramatic impact towards its economy that many recall, “The Dutch Disease.” “The utmost important magnitude of the Dutch Disease was that agricultural production declined to almost nothing and the country fell behind in industrializing, relative to other Latin American countries” (Wilpert, 2003). Thus, Venezuela had passed a reform oil policy that was the Hydrocarbons Act, which was from the oil revenues based on the income of the mines (Wilpert, 2003), bringing the state’s income to stability.

Venezuelans only pay 5.8 cents per gallon by the official exchange rate but by an informal exchange rate, used for most exchanges, the price dips to only 1.5 cents per gallon. Due to Venezuela’s decision to continue this subsidy for such a long time it has crippled their economy and will continue to prevent economic and social progress as long as this excessive government subsidy is not corrected.

Venezuela officially called the Bolivarian Republic of Venezuela is a country on the northern coast of South America. It is known widely for its petroleum industry but it is now its roughest situations of all times. Milton Friedman once said that, if you put the government in charge of the Sahara desert, there’ll eventually be a shortage of sand. No wonder that, after 14 years of socialist government, Venezuela the country with the world’s largest oil reserves is currently importing gasoline. This fact highlights Venezuela’s agonizing dive into chaos as the economy crumbles and the nation’s social fabric unravels.

Venezuela was once Latin America’s richest country because of its production of oil. Internationally, Venezuela was positioned ahead of Saudi Arabia as a country who had the largest oil reserves because the Orinoco belt contained an estimated 1.2 trillion barrels of oil. After the oil prices climbed to $100/bbl. in 2007, former President Hugo Chavez took this as an opportunity to seek more revenue which the government was using to fund the welfare programs it offers its citizens such as food, housing and services for the elderly that are also beneficial to refugees. However, when oil prices plummeted to barely $50/bbl., Venezuela’s oil production fell to 2.6 million BPD, which is a more than 20% decrease than average. This economic crisis lead

Venezueal sees Bolivia as its suburbs of economic policy based on the energy riches of these two republics (Venezuela - oil / Bolivia - Natural gas). Venezuela conceives its geopolitical space a rather broad and ambitious as it primarily relies on its oil wealth. Energy nationalism its potential considerably damaged. In this respect, compete with Brazil and recently with Colombia about an oil influence in the Latin American area. The driving venezuelan force has two positive and one negative aspects. These positive factors is its integrative dynamics and ability to fill national budget of petrodollars. The State is aware that the main raw materials are the most valuable natural resources - oil, natural gas, iron ore, gold, bauxite, coal and other minerals. Its negative component directed to the ideological

Venezuela's reliance on oil may be no more because a lot of Venezuela's economy is based on their oil sales. Oil prices are at it’s all time low since 1998 which has hurt them tremendously. Since Venezuela has been in a decline for many years now due to their corrupt government, the decline has fueled oil prices to drop. Once the richest country in South America this nation is turning into the poorest one. The cost of oil per barrel is currently around $45 per barrel which is a huge drop considering that the cost of oil was about $110 per barrel two years ago. While the other

Venezuela is the largest foreign oil supplier of the United States. Other goods to be exported are bauxite, aluminum, steel, chemicals, iron ore, coffee, cocoa, rice, and cotton. Imports include raw materials, machinery, transportation equipment, and construction materials. The main trading partners are the United States, Colombia, and Brazil. A large amount of oil is exported to the Netherlands Antilles and Aruba for refining. Maracaibo, Puerto Cabello, La Guaira, and Cumaná are the important

There needs to be more price control outside of the governments control to access money and loosen up the labor restrictions as multiple American and multinational firms are reducing their Venezuelan operations. High costs for oil production as well as poor cash flow have slowed investment in the petroleum sector, resulting in a decline in oil production (CIA, 2015). The fact that oil accounts for such a high percentage of Venezuela’s exports, oil prices can dramatically affect its revenue. According to Cárdenas (2014), “Venezuela will remain turbulent and volatile for the foreseeable future. Unable to reestablish Chávez’s unique bond with his base, Maduro’s only option will be more authoritarianism and more heavy-handed tactics. He intends to maintain his “offensive” amid deteriorating economic conditions” (p.

The Quest is a carries on from where the author’s award winning book The Prize left of with the expulsion of Iraqi forces from Kuwait, and the imminent fragmentation of the Soviet Union, which concluded with the rise of OPEC, and the profound resulting shift in the axis of world power, as developed nations adjusted to a new and relatively less self-sufficient reality. It explores the multifaceted world of the modern oil and gas industry, with new game changers, both as producers (Brazil, Central Asian), and also as consumers (the emerging economies of the BRICS nations). He explores the critical importance of electricity, this he characterized as the many essentials of modern society and communication, such as Ipads, smartphones, laptop computers, electronic books, all these “gadgetwatts” as he calls them, account for the bulk use of electricity. He expresses himself to be an advocate in anthropogenic climate change; he summaries the struggles in reaching any kind of international accord, but determines that the growing awareness of its impact is encouraging greater energy efficiency and above all an interest in renewables.

Venezuela owns one of the biggest oil reserves in the world. However, unlike many Arab countries do, the Bolivarian country does not enjoy much wealth. Several Venezuelan petroleum companies simply do not have enough money to maintain and to technologically advance the refineries and other necessary systems. As the results, the government is left with no choices but to import oil from other countries, using up a considerable amount of GDP that could have been used in other areas. Furthermore, the unstable nature of the Venezuelan national currency crumbles its economy and places it in a large pool of debt. The government must instill stability in the national currency and decrease the overly high dependency of oil among its citizens in order

The oil-rich Bolivarian Republic of Venezuela, located on the northern coast of South America, was for many decades considered among the wealthiest nations in the entire continent. While having the largest proven oil reserves in the world has often proved a tremendous boon for Venezuela, the very black gold that has been the cause of its success has also proven to repeatedly be its kryptonite. Over half of the nation’s Gross Domestic Product stems from petroleum exports – which equates to approximately 95% of total exports. It is really not too hard to imagine what drastic consequences shifts in global oil prices could have on the economy.

How is it that the country that possesses the world’s largest supply of oil will have to import oil? Venezuela is a study in contradictions. In 1922 oil was discovered in Venezuela and developed and exploited by United States oil companies. During the 1940’s the leftist government negotiated favorable terms for Venezuela, after which the economy grew continuously until it was the strongest in South America. In fact in 1950, Venezuela became the world 's fourth wealthiest nation per capita. In 1960 Venezuela was one of the founding members of OPEC (Organization of the Petroleum Exporting Countries) OPEC was, created at the Baghdad Conference on September 10–14, 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. By 1973 Venezuela voted to simply nationalize the oil industry allowing it to create a massive refining and marketing system to export its oil. There was no doubt that a country rich in natural resources and largest oil reserves in Latin America and one of the largest reserves in the world, and a current population of over 30 million, that Venezuela has tremendous potential.

Venezuela has the world’s largest oil reserves and by 1960, it became the wealthiest country in Latin America. Petróleos de Venezuela (PDVSA), the state owned company, was the key to economic and social development in Venezuela under president Hugo Chavez. His government was settled in an environment where the oil prices were rising and the economy was booming, so he was able fund social programs and practices that were popular to the poor masses. This wealthy and growing Venezuela made Chavez to be very popular and his regime very powerful. Oil revenue accounted for nearly 90% of exports, more than 50% of government revenue, and 35% of country’s GDP.

Imagine a world where daily planned blackouts and shorter workdays were implemented to conserve energy. For people living in Venezuela and Libya, this is very much the norm. In addition to being two of the most corrupt and politically unstable governments in the world, Venezuela and Libya are plagued with problems surrounding their energy sectors. This is surprising, since they are both globally known for being oil-rich countries. Venezuela had 300 billion barrels of oil reserves in 2016, passing oil-rich Saudi Arabia at 266 billion barrels, Iran at 158 billion, and Iraq at 142 billion. Libya on the other hand, had about 50 billion barrels of reserves in 2015 (OPEC, 2016). So, where does the oil go and why do Venezuelans and Libyans suffer energy poverty if they live in oil-rich regions of the world? Nearly all of it is exported out of the country for profit, leaving many of the local citizens in these two countries empty handed. Corruption revolving around these countries’ oil exports has pairs with political instability and leads to a plethora of economic, political, and social problems.