Tornado Alley (PROG)

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US sanctions on Venezuelan oil could cut the output of refineries at home

"No Trump, No Maduro, No War: Socialists Should Take a Stand on Venezuela"

February 20, 2019 10.38pm AEDT

U.S. sanctions against Venezuela’s state-owned oil and gas company, along with some government officials and executives, are intended to put pressure on the government headed by Nicolás Maduro.

As the interim director of the Tulane Energy Institute, which tracks energy markets and provides forecasts, and someone with 35 years of oil industry experience, I’m certain that they will also reverberate in this country too – especially in Louisiana, where the oil and gas industry is among the state’s biggest employers.

Economic dysfunction

[...]

U.S. sanctions against Venezuela’s state-owned oil and gas company, along with some government officials and executives, are intended to put pressure on the government headed by Nicolás Maduro.

As the interim director of the Tulane Energy Institute, which tracks energy markets and provides forecasts, and someone with 35 years of oil industry experience, I’m certain that they will also reverberate in this country too – especially in Louisiana, where the oil and gas industry is among the state’s biggest employers.
Economic dysfunction

Despite having the world’s biggest petroleum reserves, Venezuela is now functionally bankrupt and wracked by hyperinflation. Even before the sanctions against Petróleos de Venezuela, the state-owned company known as PDVSA, its crude production was rapidly declining.

Since the late president Hugo Chávez’s election in 1998, followed by Maduro’s rise to power in 2013, the Venezuelan government has effectively destroyed the country’s political institutions, as well as its petroleum-based economy. Oil production has declined by two-thirds, dropping from about 3 million barrels per day in 2000 to around 1.2 million barrels per day in January 2019.

During this long decline, Venezuela collected payments in advance from some of its biggest customers, and therefore cannot collect the revenue now that it would otherwise be obtaining from oil production. Thanks to this practice, it actually doesn’t earn any hard currency from much of the crude that it does export.

Instead, these export earnings actually pay off cash advances from China, Russia and Repsol, the Spanish energy company.

Refineries located along the U.S. Gulf Coast in Louisiana and Texas were just about Venezuela’s last source of hard currency. That came to a halt when the Trump administration slapped sanctions on PDVSA in late January 2019.

Crude quality

https://theconversation.com/us-sanctions-on-venezuelan-oil-could-cut-the-output-of-refineries-at-home-110864

So Trump's sanctions against PDVSA are helping, guess who. And could potentially hurt Americans.