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As The Money Runs Out
Venezuela Cuts Back on Subsidized Oil Exports

High on the list of countries hit hardest by the plummeting global price of oil is Venezuela. With its own oil selling near $61/barrel, a figure that can only cover half of the government’s budget by some accounts, Venezuelan President Nicolas Maduro announced earlier this week that he has cut his budget’s “unproductive expenses” by 20%. What Maduro precisely meant by that is unclear, but analysts are noting that Venezuela has started cutting back on its subsidized oil export program to several Latin American countries. The Wall Street Journal:

Even as Venezuela pledges to continue the program, the country’s oil exports to the countries fell about 20% through October compared with the same period last year, says ClipperData LLC, a New York data tracker. And last year, Venezuela’s cut-rate oil exports declined 15% from 2012, the International Monetary Fund says.

Several participants in the program, called Petrocaribe, are preparing for further declines, which diplomats said stand to upend spending plans and tip some economies into recession.

Petrocaribe was costly to Venezuela even in good times, but its largesse bought it regional clout, as well as cover in international institutions such as the UN. If oil prices remain at current levels or sink lower, we’re likely to see Venezuela’s fortunes decline further on the international stage, even as it faces a more volatile political situation at home.

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  • Jacksonian_Libertarian

    Communism and Socialism have never worked, but despite all the evidence the leftists continue to say it just wasn’t done right.

  • FriendlyGoat

    We may not have liked the tone of Hugo Chavez, but there is nothing in particular for us to cheer about that Venezuela is going to have problems with the oil price. This country is not Russia or Iran on the geopolitical stage.

    • Denise Kearney

      I­­­­­’­v­­­­­­e s­­­­t­­­­a­­r­­t­­e­­­­­d e­­­­­a­­­­­r­­­­n­­­­­­i­­­­n­­­­­g 8­­­­­­­­­5 d­­­­­o­­­­l­­­­­l­­­a­­­­­r­­­­s/­­­­­­h s­­­­­i­­­n­­­c­­e i s­­­­­­t­­­­a­­r­­t­­­e­d f­­­­r­­e­­­e­­­l­­­a­­n­c­­­i­­­n­­g o­­­­v­­­­e­­­­r t­­­­­h­­­­­­e i­­n­­­t­­­e­­­r­­­n­­e­­­t h­­­­­a­­l­­­f a y­­­­e­­­­­­a­­r a­­­­­­g­­­o… M­­­­­­­y j­­­­o­­­­­­b i­­­­­s t­­­­­o w­­­­­o­­r­­­­­­­­­k a­­­­­­­­­t h­­­­­­o­­m­­­e f­­­­o­­­­­­r f­­­­­­e­­­­w h­­­o­­u­­­­­r­­s e­­­­­v­­­­e­­­r­­­y d­­­­­­­a­­­­y a­­­n­­­­­­d d­­­­­o s­­­­­i­­­­­­m­­p­­l­­e w­­­­o­­­r­­­k i g­­­­­­e­­­­­t f­­­­r­­­o­­­­m t­­­­h­­­­­i­­­­s c­­­­­o­­­m­­­­­p­­a­­­­n­­­­y t­­­­­h­­­­­­a­­­­t i d­­­­­i­­­s­­­c­­­o­­v­­­e­­r­­e­­d o­­­­­n t­­­­h­­­e i­­­­n­­­t­e­­r­­­n­e­­t… I a­­­­­­­m v­­­­e­­­­r­­y h­­­a­­­­p­­­­p­­­y t­­­­­­­o s­­­­­­­h­­­a­­­­­r­­­e t­­­­h­­­i­­­s t­­­­­o y­­­­o­­­u… i­­­­­­t­­’s a­­­­­­­n a­­­­­m­­­a­­z­­­i­n­­g j­­­o­­­­b
      -> RE­A­D H­E­R­E W­H­A­T I D­O <-

    • General_Chaos

      Please. Anytime anti-Americanism and authoritarian socialist economics take a body blow it is a good day for the US. The sooner the Chavista model is discredited the better off the entire region will be.

  • Michael Williams

    Imagine how Venezuela would look if instead “largess” intended to buy clout, ie power in the region, the profits were reinvested into Venezuelan schools, infrastructure and banking system. Too late for this go round I guess. FriendlyGoat is right though Venezuela pre Chavez was making some very smart moves. They bought, at the perfect time, into the carbon business and made the money the commies have been spending since. I’d say bring those guys and girls back in charge, but they are probably living happily in Miami.

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