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Oil-rich Venezuela goes bankrupt due to coronavirus and U.S. sanctions

NewsOil-rich Venezuela goes bankrupt due to coronavirus and U.S. sanctions

The outlook is bleak for the Venezuelan economy in view of the impact being caused by the U.S. OFAC (Office of Foreign Assets Control) sanctions against six U.S. companies to cease operations in Venezuela until next December.

Venezuela has collapsed and is bottoming out because 97% of foreign exchange earnings come from the national oil industry, PDVSA. Once Petróleos de Venezuela is destroyed, the country falls into nothingness.

U.S. oil sanctions add to the tragedy of Venezuela’s coronavirus. The fall of national production from 3.2 million 20 years ago to less than 500,000 barrels today, adds to the fall of prices to less than zero per barrel in the future markets.

The IMF announced its projections for 2020 and 2021, already considering the effects of COVID-19; for Venezuela it projects that the inflation rate in 2020 will be 15,000% and that the economy will fall by 15% although it previously projected a drop of 10% (Latin America: GDP: -5.2% Inflation: 6.2%).

This whole scenario conspires against Maduro, although it seems not to affect him. “Maduro could take advantage of the coronavirus if he had the means to hold on to power, but the problem is that the country is in ruins, collapsed and bottoming out.


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