Venezuela’s oil production has dropped by 40% since the end of 2018 and is now one-third of its 2012-2014 level.
OPEC says Venezuela only produced 960,000 barrels per day in March. This is down from the 1.4 to 1.5 million barrel per day through most of 2018.
If Maduro Does Not Have Oil Money Then It is Costly for Russia and Cuba to Keep Him in Power
Every 100,000 barrels of oil per day is about $1.4 billion per year or $120 million per month. Oil is at $50 per barrel but Venezuela cannot get market prices. They have costs to refine their heavy oil to more valuable lighter oil.
Venezuela had domestic oil consumption of 450,000 barrels per day and they have to make oil shipments to Russia, China and Cuba for debt repayment and security services. This is basically protection money.
Venezuela needs at least 200,000 barrels per day internally. They have to run the military and police. Russia, China and Cuba have to be paid or Venezuela’s security (aka prevention of a coup) will be crippled.
Venezuela has made several settlements to pay several debt holders to prevent the seizure of its US oil refinery assets and other foreign assets.
PDVSA has various debt obligations. The US has placed sanctions and has recognized the new leader Guido. It is unclear how much money Maduro is getting and what can be paid and kept.
Russia and Cuba might get paid to prop up Maduro and they would be propping him up for geopolitical reasons.
It would become a long-term financial drain because a US-sanctioned Maduro led Venezuela will not fix its oil industry.
SOURCES – OPEC, Tradingeconomics, IEA
Written by Brian Wang, Nextbigfuture.com