Oil-Rich Venezuela Forced to Import American Oil, by Kerry Lear 9/24/16
Even
though Venezuela has huge reserves of oil, the country has been forced to buy
oil elsewhere. From 2001, the country has poured over $250 billion made from
the oil industry into social programs. Venezuela’s successful petroleum
industry once fueled the country’s Socialist revolution. But, this has
evidently backfired.
Fast
forward to today and the country is in complete disarray. Venezuelan citizens
are desperately waiting online for hours to get into grocery stores with empty
shelves. The lack of resources has created an extensive illegal smuggling
network to and from Columbia. And the economy has seen a triple-digit
inflation.
The
lifeblood of the country, the oil industry has seen a detrimental effect from
the socialist rule. Half of the Venezuelans government’s revenues comes from
this industry. But, the oil production has plummeted to only 2.4 million
barrels a day, which is a 350,000-barrel decrease from a year ago. This is a
million barrels less than in 1998, prior to the socialist movement.
With
limited resources, one oil rig was attacked by armed gangs who took as much oil
as they could. Another rig sat idle for weeks due to a missing piece of
equipment. Not to mention, oil workers are having difficulty surviving on their
little salaries and often faint while high in the rigs.
Things
have gotten so bad, that the country is buying oil from the United States. “You
call them the empire,” said Luis Centeno, a union leader for the oil workers,
referring to the United States, “and yet you’re buying their oil.” He also said
the Venezuela’s state oil company has stopped providing new safety
equipment.
Venezuela
has been losing valuable business. “Now, even Venezuela’s subsidized oil
shipments to its vital ally Cuba are slowly being phased out, oil executives
with operations in Venezuela contend, forcing Havana to look to Russia for
cheap oil,” writes The New York Times.
Formerly,
the US has a big market for Venezuela’s oil. However, the tables of turned and
the country is being forced to start importing from the US. Starting earlier
this year, 50,000 barrels a day of light crude has been shipped to the country
to help keep the industry afloat.
But,
this isn’t likely to last long. Venezuela’s state oil company, PDVSA is
struggling to make payments for the oil imports. Some tankers have even waited
two weeks in port for payment and then just leave because they never get it.
The
Venezuelan socialist state isn’t only impacting the poverty-stricken citizens,
but soon the rest of the world. “Venezuela
accounts for less of the international oil market today, but its exports still
make up roughly 2 percent of the world’s output. That means that a serious
decline in Venezuelan exports, especially if accompanied by a crisis in Nigeria
or Iraq, could tighten the market enough to send oil prices climbing again.,”
writes The New York Times.
And
the solution? Just to keep borrowing more money. “Venezuela accounts for less
of the international oil market today, but its exports still make up roughly 2
percent of the world’s output. That means that a serious decline in Venezuelan
exports, especially if accompanied by a crisis in Nigeria or Iraq, could tighten
the market enough to send oil prices climbing again,” writes The New York
Times.
Author’s note: The situation in Venezuela cannot be patched
up by borrowing money. Again, this country is the perfect example proving that
socialism doesn’t work. The only way for the country to survive is if socialist
ideals no longer rule the state.
Comments
The same
is true for every country with socialist policies. Families need economic
freedom where they can control prices using the law of supply and demand.
Norb
Leahy, Dunwoody GA Tea Party Leader
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