PDVSA is engaging in all kinds of no cash deal making to bypass oil cargo seizures. But the company could face even more difficulty this year as Venezuela’s financial woes have bitten into its capacity to keep its oil fields running.
Smaller producers are eager to work with OPEC or join the cartel in an effort to boost their reputation, amplify their market clout, and gather research, information, and resources to attract investment.
Upcoming presidential elections in Latin America could be decisive in advancing policies to maintain oil revenues. However, in the current climate of growing polarization and deeply unpopular incumbents, the elections are generating tremendous political uncertainty.
Canada's oil market is dealing with transportation constraints while heavy crude producers such as Colombia and Venezuela are seeing output declines and OPEC producers are cutting production.
The volatile nature of oil prices, widespread opposition to new projects, and the uncertainty of local and national politics make it crucial for Colombia to diversify its economy.
Stacking PDVSA with military officials may help President Maduro avert unrest in the short run, but it will likely accelerate the deterioration of the state oil company.
OPEC will attempt to manage perceptions in both the physical and financial markets—but given its track record, it will not likely produce stability and certainty, but instead ambiguity and volatility.
The risks of more oil production losses have intensified as the financial screws on Caracas continue to tighten. Deteriorating conditions in Venezuela are occurring at the same time OPEC is looking to extend its production cut and tensions throughout the Middle East are rising.
There’s little question the global market will lose more production from Venezuela in the coming months and years. The country's crude output is at risk of falling to as low as 1.2 million barrels per day.
The recent tension in Iraq highlights the ongoing reality of the global oil market: Many key oil-producing countries are politically unstable.