Finance Monthly March 2019 Edition

17 www.finance-monthly.com FRONT COVER STORY - VENEZUELA’S OIL CURSE l Production r pressure due to crisis 2021 5 2017 2019 950K Barrels Sources: https://www.thetimes.co.uk/article/ venezuela-frustrated-poor-losing-faith-in- beleaguered-maduro-22cf7f66z https://edition.cnn.com/2019/02/04/ americas/europe-guaido-venezuela- president-intl/index.html https://edition.cnn.com/2019/01/28/ politics/us-sanctions-venezuelan-oil- company/index.html https://www.investopedia.com/terms/r/ resource-curse.asp https://www.eia.gov/dnav/ pet/hist/LeafHandler. ashx?n=PET&s=IVE0000004&f=A https://www.forbes.com/sites/ ellenrwald/2017/05/16/venezuelas- melt-down-explained-by-the-oil- curse/#39dcb3d0282b https://www.ogj.com/articles/2019/02/ rystad-energy-venezuela-production- could-fall-below-700-000-b-d-by-2020. html https://www.bbc.co.uk/news/world-latin- america-47104508 Although Venezuela is still seen as an oil powerhouse, especially due to its production of heavy crude (which is not widely available in the world), the oil world is expecting the historic collapse of its oil output to only intensify. The country needs to offset the effects of the US sanctions, find new financing and not let the people of Venezuela bear the brunt. This will not be easy though. As the government desperately courts new buyers for its oil, it may find them hard to come by, with Chinese sales in a pattern of decline and new markets such as India worried about quality and transport issues due to much of Venezuela’s shipping designed for shorter distance travel. Indeed the government and prospective buyers will only be too aware that it is always harder to negotiate from a position of weakness. Unfortunately for the people of Venezuela who are struggling to get basic supplies, and are facing starvation and illness, the actions and the effects of the country’s government and the oil curse look set to reverberate for some time. SO NOW WHAT?