Venezuela has one active oil rig according to the Baker Hughes international oil rig report. Venezuela is producing 367,000 barrels of oil per day. In 2016, Venezuela’s economy needed about 600,000 barrels per day. Venezuela depends upon oil import shipments from Iran. Venezeuela had oil production levels of 2.4-3.5 million barrels per day and was able to export about 2 million barrel per day.
Iran is pumping less than 2 million barrels per day which is about half of its post-1980 four million barrel per day peaks. Iran had 6 million barrel per day production under the Shah.
Both Iran and Venezuela are under US economic sanctions. Venezuela’s economy collapsed under the socialist mismanagement of Chavez and Maduro.
Cuban advisors were able to teach the authoritarian leaders in Venezuela how to stop uprisings and maintain control in spite of a terrible economy. The agreements and training with Cuba have lasted for twelve years.
90% of Venezuela’s population now lives in poverty and are barely getting enough to eat. 4 million people have fled the country.
A Northern Venezuelan refinery had an explosion last month.
Venezuela’s oil industry will probably never recover. All of the deterioration in infrastructure means it would cost many billions of dollars and technically skilled resources to repair and restore the facilities. However, Venezuela’s 300 billion barrels of oil are mostly heavy oil with high sulfur content. COVID has caused a drop in world oil demand from 100 million barrels per day down to 91 million barrels per day. There is more valuable and climate change friendly oil resources in the USA and Saudi Arabia. Any recovery in the world economy will tap into those other sources of oil.
There will also be a flattening of oil demand during the 2020s with increasing electrification of cars and trucks. this will lead to declining world oil demand starting around 2030.
SOURCES – Opec, Reuters, Oilprice, Baker Hughes
Written By Brian Wang, Nextbigfuture.com
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
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Something needs to be done as people are the ones that pay not the powers
This assumes that things wouldn't be made the way they are without government regulations. I don't think that assumption is justified.
How is Venezuela destabilizing the (free) market?
It's kinda "free" to them because the USA is footing the bill to allow world trade. So if we're providing that for free and they try to destabilize our markets, then why should we keep providing it?
It's not a matter of international commerce courts, but why the USA should support a country that is counter to its own best interests. This is why sanctions work.
If Sweden placed sanctions on Venezuela nothing would happen. Sweden isn't the guarantor of world commerce.
I quite agree!
You couldn't say in say 1930 that the USSR was at least able to provide for the basic needs of its people*. So evidently an unsustainable regime can survive long enough to adjust their policies to a sustainable mix.
From what I've read, Lenin pretty quickly delivered on his "peace, land, bread" slogan by getting out of WWI. I'm no fan of the USSR, but compared to the pre 1917 Tsarist economy, they had much improved the life of the masses by 1930.
True, but again I refer to the "forest and tree" syndrome. Totalitarian (but non-communist) China is probably around for a while. They smartly dumped communism in the 80s and adopted capitalism. It's the reason that Tiananmen Square wasn't the regime's downfall. That said, it's still a totalitarian govt that represses its own people. It's days are numbered. Sooner or later, no matter how much material wealth the country has, the Chinese people will get fed up with the regime. A golden cage is still a cage. And no likes living in a cage.
Govt regulation does not work? Then how do you explain all the consumer product regs that keep you safe everyday? Gosh, there are so many I dont know where to begin. I suggest you open up your fuse box and examine it and also the electrical wires attached to it. All are governed by regulations enacted by the govt to ensure the box functions properly, and doesn't overload and burn down your house. Same goes for the air bags and seat belts in your car that keep you alive in an accident. Not an hour goes by when you dont interact with some object that was built based on a government reg. all your appliances, your car, your tv, computer, the air you breathe, the water you drink, and the VACCINES you get, all are safe due to government regs.
I've no experience running a refinery, but to refine heavy oil, I believe the big difference is that you need a catalytic cracker to create shorter alkanes from longer alkanes. These were built because at one time there was a glut of heavy oil which sold cheaply.
If you can't get heavy oil, you just shut down the cracker, and run the rest of the refinery on lighter oil, like west Texas intermediate grade which is in great supply now.
The world will probably never need another new refinery. Refinery's already in existence can be maintained, repaired, with major components occasionally refurbished, or replaced.
Government's proper role is to provide courts where those who's property, or persons are injured can seek damages. Government regulation of corporations does not work because the regulating agency is inevitably captured by the corporations, the FDA is the perfect example.
Click on the 3 little dots to the right of the comment.
Select "Report" and if enough people do so our little troll gets banned.
Demand being exported is obviously an unusual way of expressing the concept. But I think it's justified.
Country X has significant demand for commodity A. Because it is easy enough to trade internationally, this creates demand in other countries.
Country Y, which might have very little domestic demand, still experiences "high demand" because many people in country Y know that they can make big profits selling to country X.
In some commodities (eg oil) you have secondary markets where the "demand for oil" is bought and sold on the market, just like any other valuable commodity. "Demand for oil" is given a fancy technical name like "a put option".
The Germans were able to extract a lot of value out of places like France and the Netherlands.
Partly because those were some of the countries that had lent them very large sums… so those debts weren't a problem any more.
And partly because, by the standards of 1939 Germany, the rest of Western Europe wasn't particularly highly in debt, so that now they could leverage them up to the same level as Germany and get a lot more cash. (Yes, even at this stage you had countries like Switzerland and Sweden still doing business with the Reich.)
But now you have a much larger population that needs to be fed (minus any sub populations that could be eliminated), industry that needs imports to run, and the perfidious British had cut off the sea trade to all these places too.
So it was only a one time boost.
You couldn't say in say 1930 that the USSR was at least able to provide for the basic needs of its people*. So evidently an unsustainable regime can survive long enough to adjust their policies to a sustainable mix.
By coincidence, communist china, which was at least as unable to provide for the basic needs of its people in its early decades, reaches the 72 year point on 21st September 2021.
*Or rather, you couldn't say that truthfully. Various other communist organisations such as the New York Times were quite happy to say such things at the time. In the weirder parts of the internet you can still find people who make such claims. Even on this comment board…
I think Reichsbonds were not all that important, but lot more so the "Wechsel" – promissory notes, they could be traded easily. When they became due they were paid with more promissory notes. In order to avoid financial collapse Hitler had to start the war. I presume he intended to pay the notes eventually with the sale of conquered land and goods produced by the forced labour of conquered people.
Hitler stole the wealth of certain upper class Germans who were no longer considered human under his ideology. That kind of prosperity never lasts very long. He turned the wealth into war and hastened the destruction of his people. Now Germans are a sad volk indeed.
Trump is always mocked and always has been, especially by the wise and sagacious late night comedy hosts who serve as role models to all good consensual minds!!
Demand is not exported, unless you mean that drug use in South America has gone up due to the US somehow. Money from the US is certainly exported to the cartels as it is to the crime cartels in Washington DC.
Cuba knows what it is talking about, it has survived for over 50 years in abject poverty and mismanagement. Venezuela has a ways to go.
I quite agree that political events don't follow predictable timelines. That said, for any system of government to endure over the long term it must be sustainable, both politically and economically. In that light, L's point is short sighted at best. As usual, he can't see the forest because there's a tree in his way.
Brian's prediction was wrong, but L seems to believe the the Maduro regime is here to stay. Do you think the current system in place in Venezuela is viable over the long term? A system that represses its own people and reduces them to poverty. Can you offer up an example of another regime that has used that model sustainably over the long term? And perhaps more to the point, would you consider advocating for such a regime, or moving there to live?
Its extremely difficult to see how a repressive marxist regime will endure. Overall, the governments that have stuck around over the last 200 years have been democratic and prosperous, otherwise people overthrow them. Even the USSR, which was at least able to provide for the basic needs of its people, eventually stagnated and died after just 72 years.
Yeah! Socialism!
Large numbers of the oil company workers left when they stopped getting meals and had missed paychecks. They drove off in the trucks and took parts to sell. The scavenging of pieces of infrastructure so that people could buy food has accelerated the decline beyond just lack of maintenance
The USA is acting as a dictator as well though. They decide that they don't like Chavez and Maduro, and cripple the country with sanctions. The USA does not care about finding a basis for that in international law (which would be more democratic), for them it suffices that they consider something to be right or wrong, just like dictators do (most dictators will have some explanation why it's perfectly reasonable what they are doing). They call it "american exceptionalism" but it's not much different from "I-am-Hugo-Chavez exceptionalism".
I think that is true of both sides of the political spectrum. Both the left and the right use the power of govt, gained via politics, to have a say into how the economy is run. The left with its marxist, socialist, communist, diversity nonsense. And the right in its never ending quest for more profits, lower labor costs, and less regulation. The right may have "technical and business ability" but that is offset by their short sighted greed, anti-environmentalism, tendency towards monopoly, and authoritarianism. Neither side is really fit to run anything. Too much bias, anger, ego, and short sighted stupidity. That's the problem with politics. Its all about whose in, who's out, who gets what, and who doesn't. Its never about consensus, mutual benefit, or fairness.
Chris68
Mostly agree, but there's no such thing as a "true free market" even in capitalist countries . There's always going to be some level of government management via regulation, or industry would be dumping tons of hazardous chemicals into the environment.
Chris68
Big L does have an actual point this time.
Brian was bold enough to give an actual timeline for Venezuelan government collapse. And it was clearly wrong.
Political events don't follow nice predictable laws and timelines. Especially something like a coup that is decided by the individual decisions of maybe a dozen people. They have their own motivations and thought processes, and all sorts of internal events going on that you can't learn about from public news on the other side of the planet.
You can argue there is a strong driving force for X to happen, but that's about the most you can say.
I think current scholarship is not so positive on the "economic miracle" of 1930s Germany.
According to what I've read (not really a big scholar on the subject) the Germans really just went deep, deep into debt in order to finance a lot of public works and military buildup.
As we've seen in more modern times, this gives your GDP and employment numbers a good boost, but only until you run out of people willing to advance you more cash.
Now it was the great depression: that boost to the employment numbers keeps the population happy, or at least not-unhappy. So it keeps the government from being voted out while they consolidate their power structures.
But in terms of how much money the government could raise, they were rapidly running into a brick wall by the late 30s. So they started doing things like outlawing imports without government permission so that only the military got to use that valuable, disappearing, foreign currency reserves, or just plain confiscating huge chunks of capital from "undesirable" sections of the population.
Towards the end, even good, patriotic Germans were getting paid (workers) or making profits (companies) on paper, but by law had to reinvest those into government bonds and accounts where it was immediately spent just to keep all the balls in the air. So the numbers said that all this profit and good wages were occurring, but in reality it wasn't.
Trying to cash in your 1943 Reichbonds in 1950 would have been… interesting.
The national resource curse. Having all of your eggs in one basket is always a stupid idea. Diversify your economy. Start with shops and work backward thru the supply chain. Concentrate on doing what you can that add value without requiring a lot of capital.
You should consider reading up on the Treaty of Versailles, the politics of the Weimar Republic, and the growth of the Nazi Party. Many in Germany cheered Hitler for a variety of reasons. Some make sense such as when he abrogated the treaty. In the average German's eyes it was a crime against the German people as was the French occupation of the Ruhr and the selective application of self determination. Another reason is Hitler's success in drastically ending unemployment during the Depression.
Mismanagement period. Not socialist mismanagement since all governments in the world are socialist. In case some don't understand what I mean. There are socialist since they governments aren't run to make profit.
See, now that WOULD be a problem they can blame on the USA.
If the USA wasn't exporting demand for narcotics to South America then there wouldn't be a big drug cartel problem there.
People whose power comes from politics, not technical or business ability, want to give politics more of a say in how technical and business things are done.
I wonder why?
Oh Lukkha, Lukkha, Lukkha. 2018, 2025, 2030, 2050 – it doesn't matter what year it happens. The Chavez-Maduro Regime's days are numbered. Essentially, Venezuela is a failed state. its socialist economic policy coupled with its rejection of democracy can only lead to one thing – collapse. It is inevitable.
I think the issue is that:
So oil refiners are really scared to borrow a huge amount of money to rebuild a refinery that can be operated anyway providing they just purchase the correct blend of crudes that their equipment is set up for.
Maybe Venezuela can survive by selling vote counting software to the Democrats.
Stand by to see Venezuela become the number one exporter of cocaine, and opiate products, now that petroleum revenues are drying up. The raw materials are much easier to obtain and refine for those products than petroleum.
Apparently the dominion voting machine company is active in both Venezuelan, and American elections, so they are both likely to be crooked.
The economies of Germany, and Italy prospered under the Fascists, relative to their neighbors unlike the Cuban, Venezuelan, or any other economies under Marxist regimes.
Although Fascists/national socialists, and Marxists/communists are all socialists, and in their models ultimate power resided in the political elite, the former allow production by corporations, and sole proprietors, while the latter mandate production by communes, and state owned concerns managed by political appointees.
Since a fascist economy is closer to a free market, where people make their own economic decisions, they are uniformly wealthier than Marxist economies.
The oil must be at a large discount to international price to attract that much interest. If that is the case, it's not nearly as profitable as it should be.
Couldn't you just mothball the catalytic cracking units, and refine lighter crude?
I understand skilled domestic petroleum workers have left for greener pastures, rather than have an excessive amount the fruits of their labors stolen from them. Who can blame them?
Now most Venezuelans capable of running a business have left, particularly for Colombia. What good is owning a store, if the government forces sales for less than the cost of replacing the stock? I guess the plan is that starving peasants don't have the strength to overthrow anything.
Ah, the worker's paradise of socialism realized. This is what happens when government manages industry, and hands out jobs based on political orientation, rather than skill, and talent.
This is what "the squad" wants for America. Diversity hires, open borders, and the green new deal are only the beginning.
As usual, you are incorrect. Trump should be mocked everywhere, especially in public.
You say that like it's a bad thing, save some tears for when the same occurs to the US sector. I plan on giving up my sweet sweet dividends from the sector over the next few years.
Chavez and Maduro were elected as presidents by the people of Venezuela, just because you don’t like the results you think they are rigged. No difference then, with half of Americans on your own election.
I used to wonder how people around the world would admire Hitler and Mussolini back the the 1930s. Yet here we have a live specimen of someone who loves to kiss totalitarian butts.
This was plainly obvious the moment all technical support, mostly from the US, pulled out of Venezuela as the nationalization of the oil industry transpired. They had already accessed the easy reserves, and their oil was always going to need high end processing that requires skills and material support. Adding to the headache is the remaining reserves, while plentiful, are all deep water ops that also requires skills. If they had made more effort to train and retain domestic talent rather than outsource, they might have been able to temporarily hold off the inevitable, but without the technical materials support for the refineries it was a losing proposition. Most of the competent domestic engineers probably left when they saw the writing on the wall, heading to other countries and/or multinationals.
As Will Rodgers said, "Thank God we are not getting all the government we are paying for."
Regretfully they tell us
But firmly they compel us
to say good bye
To you
So long, farewell
Auf Wiedersehen, goodnight
I have to go and leave this awful sight
Venezuela’s petroleum is majority heavy-oil in sand, a viscosity lighter than Canada’s bitumen. As such, it can be modestly heated a bit to obtain liquid flow, and fully separated with solvents. It is not what most of the public thinks of the term oil-well.
The U.S. refineries in the Gulf of Mexico border states specialized in processing this metal containing heavy oil due to proximity, low cost, and the good relations over fifty years ago. This changed about two decades ago.
The import of Canadian tar-sand oil began in earnest with the shift of politics of the Chavez election; and, the subsequent government shift against foreign investment of companies with extensive petroleum operational experience. The Canadian product is less desirable than the Venezuelan oil on a technical basis, for use in the legacy refinery engineered for the heavy oil.