Venezuela: Squandering a Gold Mine (February 28, 2014)
While it is difficult to assess the degree to which daily life in Venezuela has deteriorated since president-elect Nicolas Maduro has taken the reins, general consensus indicates that the situation will likely get worse before it gets better. Anecdotes of consumer good shortages widely pepper the international press and sound alarms for international companies with exposure to Venezuela. As recently as 2000, Venezuela was producing upwards of 3.5 million barrels per day of crude oil. However, the nationalist agenda, oil worker strikes and crumbling financial conditions led to a decade of infrastructure neglect which has ultimately cost the country 1 million barrels per day of production – or, at current prices, nearly $980,100,000 per day in revenue. Today, the United States imports roughly 800,000 barrels per day of crude oil from Venezuela, but the current state of domestic Venezuelan affairs could impact its refining system increasing Venezuela’s reliance on the United States.