Comments by "Geoff Challis" (@Geffo555) on "Channel 4 News"
channel.
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@geniusgeneral02 . One bit..
Oil comprises 95% of Venezuela's exports and 25% of its gross domestic product (GDP),
so high prices provide a boon to the country's economy. The period from 2006 until the first half of 2014, save for a brief dip in late 2008 on the heels of a global recession, saw oil prices mostly hover between $100 and $125 per barrel. During that time, Venezuela used its revenues from high oil prices to fund its budget and wield political power. By providing subsidized oil to as many as 13 neighboring Latin American countries, most notably Cuba, Venezuela extracted political favors and attempted to build a coalition against rival nations, namely the U.S. (For related reading, see
Its oil giveaway program became more of a burden than a boon for the Venezuelan economy as oil prices collapsed toward the end of 2014. Venezuela was giving away over 200,000 barrels of oil per day – half of which goes to Cuba – reducing the amount it had available to export for profit. When oil prices were over $100, Venezuela received enough margin from exporting oil that the lower volume doesn't harm its economy. When oil dropped significantly below that price level, the country's margins were squeezed to the point where it did not meet its spending, resulting in ballooning debt.
In early 2015, Venezuelan president Nicolas Maduro, facing record low approval ratings brought on by the country's crumbling economy, embarked on a world tour to implore other nations with heavy influence on the oil market to take measures to push the price back to $100 or more. Maduro's desperate actions serve as a testament to oil's grip on the Venezuelan economy.
US oil prices 2014
$93.17
US oil prices 2016
$43.58
Venezuelan President Nicolas Maduro seems to think so. In a recent interview that appeared in Reuters, Maduro said he thought the United States and Saudi Arabia wanted to drive down oil prices “to harm Russia.”
Iranian President Hassan Rouhani said the same thing,with a slightly different twist: “The main reason for (the oil price plunge) is a political conspiracy by certain countries against the interests of the region and the Islamic world … Iran and people of the region will not forget such … treachery against the interests of the Muslim world.”
US-Saudi “treachery”? Is that what’s really driving down oil prices?
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