Venezuelan President Hugo Chavez has called on OPEC to cut oil production in order to boost sagging prices. “Now that the prices are coming down, we are going to take (to OPEC) the proposal of cutting production,” said Chavez yesterday as crude prices have been nearly half as much since its high of $147 per barrel in July.Chavez’ remarks come in anticipation of the oil cartel’s summit which begins on Friday.
Oil has been a key component of Chavez’ influence across the region and beyond. Yet that may soon change according to this article from the Christian Science Monitor:
Coupled with production declines, Chávez's days as the ultimate benefactor could be coming to a close.Image- BBC News
"In terms of revenue and oil dependence, Venezuela is by far the most vulnerable," says Ramon Espinasa, a former chief economist at Venezuela's state-company Petroleos de Venezuela (PDVSA) and today an energy adviser for the Inter-American Development Bank. "It's not just prices falling but volumes are down, which compounds the drop in revenue. That's scary"…
Domestic spending is likely to remain stable for now, but Chávez's "Bolivarian Revolution" abroad – via subsistence programs like Petrocaribe and the Bolivarian Alternative for the Americas (ALBA) – would probably be retooled, says RoseAnne Franco, lead analyst at PFC Energy in Washington.
Sources- The Latin Americanist, AFP, Sydney Morning Herald, Christian Science Monitor
3 comments:
I live in Venezuela, one of the most important oil exporters of the world. My country receives more than 85% of his national income from the petroleum industry, for that reason I support the cut to the oil production.
You can visit my blog –in English- if you want a greater explanation of my opinion.
The New York Times also published a story recently about the potential impact of dropping oil prices on Venezuela's influence abroad (http://www.nytimes.com/2008/10/21/world/21petro.html?scp=4&sq=venezuela&st=cse).
No matter what, I imagine the Castro brothers and Evo Morales will stay by Chávez's side. But I wonder how he'll be treated by more moderate leftist leaders, such as the presidents of Chile and Uruguay, once he no longer has billions in petrodollars to distribute around the continent.
What goes around, comes around Mr. Chavez. You've had a great time watching and pointing a finger at my country in economic turmiol. While I would never wish the people of Venezuela ill, it looks like it's time to pay the proverbial fiddler. Good luck!
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