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CARIBBEAN: Venezuelan subsidized oil sales to the Petrocaribe program in trouble

By Merco Press

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Petrojam oil refinery Jamaica. Photo credit Petrojam.

Petrojam oil refinery Jamaica. Photo credit Petrojam.

MERCO PRESS – Deputy National Security Adviser Ben Rhodes said that the U.S. might be able to provide some “resources” to the 17 countries that would be affected by the disappearance of the program, known as Petrocaribe, which began under the late President Hugo Chavez. But providing oil would be unlikely, forcing the countries that receive the subsidized petroleum from Venezuela now to find their supplies at world prices.

“They have benefited substantially from Petrocaribe,” Rhodes said. “We’re not going to be able to simply substitute American oil for Venezuelan oil. But what we have looked at is what is their energy security?”

Venezuela’s political opposition won a super-majority of the National Assembly in voting Sunday, its first electoral victory since Chavez came to power 17 years ago. The overwhelming margin — winning 112 of the 167 seats in Congress — will give the opposition vast power to overturn decisions made by the government of current President Nicolas Maduro, Chavez’s handpicked successor and a frequent critic of the United States.

Whether the opposition will target the subsidy program, however, is unclear. Opposition leaders long have criticized the program, which estimates say has cost Venezuela $50 billion in reduced oil earnings over the last decade. Last year, the country cut oil shipments to Petrocaribe nations to 200,000 barrels per day from twice that in 2012, according to a Barclays Bank analysis.

The British investment bank said that the cuts in oil shipments reduced the bank’s deficit forecast for Venezuela to $22.6 billion, down from more than $30 billion predicted for 2015.


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