. .. . or China. It’s Venezuela.
With the state oil company’s coffers raided for years, and not enough investment or expertise to keep up oil production, the country’s crude exports have been falling.
And with oil accounting for 90% of Venezuela’s exports, that’s a huge problem for the government.
To make matters worse, U.S. sanctions against Venezuela means that banks are cutting their links with the country.
The latest effect is an oil tanker full of one million barrels of oil sitting off the coast of Louisiana, unable to dock…
For a month.
The buyer of the cargo can’t find a bank willing to write a “letter of credit” that would allow the oil to be off-loaded, and Venezuela to be paid.
And things may well get worse, and soon.
If they do, Venezuela – the country with the world’s largest oil reserves – may well be unable to export oil at any level close to current ones.
While some of the decrease would be made up by other producers, the effect on oil prices would be drastic.
We’ll be talking more about what the effects will be, and how to protect yourself, right here in Oil & Energy Investor.