Venezuela: The Largest Oil Reserves and Crisis
Despite having the world's largest proven oil reserves, Venezuela is currently facing an economic and political crisis. This was reported by Zamin.uz.
After the US President Donald Trump administration removed Venezuelan President Nicolas Maduro from power, it proposed a plan to gain control over Caracas's 303 billion barrels of oil reserves. Washington aims to use these resources to lower oil prices on the global market and exert pressure on its competitors.
Nevertheless, Venezuela's oil industry is in a dire state. In the 1950s, the country supplied 15 percent of the world's oil, but today it produces only about 1 million barrels per day.
The nationalization policy during Hugo Chavez's era and the lack of foreign investments led the industry into decline. International sanctions further worsened the situation.
One of the main problems of Venezuelan oil is its quality and the complexity of extraction. The oil in the Orinoco River basin is very heavy and viscous, requiring high costs for processing and transportation.
Additionally, natural bacteria have degraded the oil composition, increasing production costs. Under such conditions, extraction profitability is low.
The Trump administration's plan to reduce oil prices is difficult to implement soon due to Venezuela's severe economic and technical situation. The country lacks modern technologies and service facilities, and investments of at least 10 billion dollars per year are required.
Moreover, Canada has already taken Venezuela's place in the heavy oil market. Changes in Venezuela's oil industry are also significant for China and Russia.
China demands large debt repayments from Venezuela, while Russia faces the risk of reduced revenues due to falling oil prices. Nevertheless, the high production costs make it difficult to keep oil prices low for a long time.
The question arises: Are US companies ready to invest in Venezuela's oil sector, which carries high political and economic risks? The answer to this question remains uncertain.
