The political crisis in Venezuela did not generate - so far at least - a significant rise of oil prices on world markets, Francis Perrin Senior Fellow at the Policy Center for the New South (Rabat) and at the French Institute for International and Strategic Affairs (IRIS, Paris).
However, the expert believes this is of course a very short-term reaction. The impact could be stronger in the future for the following reasons:
He pointed out that a falling oil production in Venezuela will improve the situation for the OPEC+ countries (OPEC countries and 10 non-OPEC countries), which began reducing their oil output since 1 January 2019 in order to push oil prices upwards.
"The goal is a 1.2 million b/d production cut, of which 800,000 b/d for OPEC and 400,000 b/d for non-OPEC countries. US sanctions against Iran will also contribute to this downward impact on world oil supply," the expert concluded.
Venezuela is embroiled in fast-moving political crisis, after an opposition leader stood in the streets of Caracas on Jan.23 and declared himself as the rightful interim president.
A flurry of world powers, including the US, immediately backed Juan Guaido, prompting a furious response from President Nicolas Maduro.
The socialist leader broke diplomatic ties with President Donald Trump's administration on Wednesday, ordering all U.S. diplomatic personnel to leave the country within 72 hours.
Source: Trend
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