What’s Happening with Oil in Venezuela?
A Look at the Recent Developments
Understanding the Impact on Oil Supply and Prices
Last year, the US made a deal with Venezuela to drop sanctions through mid-April if free elections were held in the country. Venezuela, in turn, expressed hopes of boosting oil production to 1 million barrels per day (mbpd) from 786,000 barrels per day (bpd). Chevron was also actively drilling to increase production in the South American country.
However, recent events have thrown a wrench into these plans. Opposition candidate María Corina Machado has been barred from running in the elections, effectively putting an end to the deal between the US and Venezuela. While there were some signs leading up to this decision, it still comes as a blow to the potential increase in oil supply from the region.
As a result, WTI crude prices have already seen a dip of $1.05, currently standing at $76.95 per barrel. This development poses a potential downside risk to oil supply, which could have broader implications for the global oil market.
How Will This Affect Me?
As a consumer, you may start to see changes in oil prices at the pump if the supply of oil remains constrained. This could lead to higher gasoline prices, impacting your transportation costs and potentially your overall cost of living.
How Will This Affect the World?
The restriction of oil supply from Venezuela could have ripple effects on the global oil market. This could potentially lead to increased volatility in oil prices, impacting economies around the world that rely on stable energy prices for growth and development.
Conclusion
While the recent developments in Venezuela may have initially been seen as a positive step towards increased oil production, the barring of opposition candidate María Corina Machado has thrown a curveball into the equation. The implications of this decision can be felt on both a personal and global scale, highlighting the interconnected nature of the oil market and the impact of political disruptions on energy supply and prices.
