How Venezuela has resorted to importing oil as its core industry faces collapse: importing barrels that cost $80 to $90 and selling them at $0.

How Venezuela has resorted to importing oil as its core industry faces collapse: importing barrels that cost $80 to $90 and selling them at $0. By Paula Rincon.

Despite having the greatest oil reserves in the world, Venezuela’s government is being forced to spend millions of dollars a day importing crude to prop up its ailing industry. …

The speed of decline in production has been vertiginous … The Central University of Venezuela says production is reaching its lowest point in 70 years. …

Filling your tank is still cheaper than drinking water in Venezuela, but the industry can no longer meet domestic demands – and is having to put exports first. [Francisco Monaldi, fellow in Latin American energy policy at Rice University in Texas] says that if production continues to fall to below a million barrels, the consequences could be catastrophic.

“The domestic consumption of oil is around 450,000 barrels and Venezuela needs the exports to repay its debt with Russia and China,” he says.

“They have to import for two reasons. One is the collapse of the refining infrastructure and the other is that its oil is naturally heavy so they need to import diluents to blend with their oil to re-export it. …

It is estimated that 10 per cent of the population has emigrated. Almost two thirds of all households have at least one family member living abroad. And among those 3 million migrants are young and competent workers who have escaped from a country that sinks deeper into crisis.

Stephen Green:

Cheap gas is one of the ways Maduro (and Chavez before him) buys support from voters. Looks like yet another socialist countdown clock is racing quickly towards zero.