To keep the oil export flowing, Petroleos de Venezuela (PdVSA), leases more than 50 oil tankers @ the cost of $800.000 to $1 million each per month.
Venezuela’s crude exports are estimated at 1.7 million barrels per day. When oil prices were high, crude and fuel exports entirely financed the government and social subsidies that maintained the popularity of late president, Hugo Chavez.
After the US Oil Lobby branded Venezuela as a corrupted state, the IMF forced the economy to surrender its resources to the American oil giants, by degrading the Bolivar currency to cause poverty among its citizens.
The Colombians played their part in the heist by luting the state-funded supermarkets at a rate of $2 billion per year. The real damage to the socialist economy was caused by US puppet regime of Saudi Arabia. They flooded the oil markets with excessive crude to half the oil prices (from $100>$50 p/b) on the international markets.
Eighteen of the 31 oil tankers, PdVSA owns were out of commission at the end of March this year. Several needed cleaning, while others are in need of repairs. To cover the gab in export capabilities, the PdVSA has leased more than double the number of vessels to complement its own fleet of tankers.
The short-term fix is driving up costs and exposing PdVSA to detentions or seizures of its vessels, when it doesn’t pay leasing fees on time. Russian shipping conglomerate Sovcomflot seized a $20 million Venezuelan crude cargo from a Sovcomflot tanker as a partial payment on a $30 million debt. The tanker was carrying crude to the Dutch Caribbean island of St.Eustatius.
Six other PdVSA vessels are struck in yards in Portugal, Turkey and Curacao for repairs. International shipping companies have signed shipping contracts that specify that PdVSA must pay penalties for delays resulting from workers strikes, late arrival of tug boats and even drugs inspections against the Colombia cocaine trade.
US sanctions blocked PdVSA from buying the necessary parts for repairs. Similar operational problems plague PdVSA oil-drilling and refining operations. The state-run oil company saw crude production plummet in 2016 to a 23-year low.
The rising costs and undermined exports are depriving the commodity it needs most, the US dollar. However president Maduro has improved Venezuela’s economy in 2016, thanks to an austerity program that was introduced to save the country’s economy. This fundamental achievement received no media attention in the West.
The essence of this system is as follows, no one it too rich, but there is no poverty either. The construction of social housing continued in 2016. Nearly 360.000 apartments and vivienda’s were built as free property to the Venezuelans.
Venezuela’s government in Caracas spends a world-record 71% of its National Budget on Social Welfare Programs. No other country in the world dedicates three-quarters of its budget to social investments. The things that cost too much in the West are therefore cheap in Venezuela. One liter of fuel costs only $0.01 cent.
Venezuela has the world’s largest proven oil reserves and also has an estimated 10% of the global gold deposits.
Reuters / AA Magnum News 2017.