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Venezuela’s future depends on China and Russia

5 11 9

Oil ministers gathered in Baku, Azerbaijan, the epicenter of an oil rush that took place a century ago. They came for the 13th meeting of the ministers of OPEC (Organization of Petroleum Exporting Countries) and non-OPEC.

Before the meeting, all eyes were on Saudi Arabia and Russia, the leading powers of the OPEC and non-OPEC countries respectively. Russia’s minister Alexander Novak and Saudi Arabia’s minister Khalid al-Falih had taken two different approaches to oil prices. Saudi Arabia, whose economy is in deep crisis, is eager to see oil prices rise to $95-$100 per barrel (the benchmark oil price is now at $67 per barrel). Russia, which has a more diversified economy, had planned on a price point at around $40 per barrel. The tension between them was to have stolen the spotlight for the meeting.

As it happened, all eyes went toward Venezuela and Iran, who now hope to be bailed out from their perilous situation by China and Russia.

Sanctions in the world of oil

Both Venezuela and Iran are under very punitive U.S. sanctions. The U.S. government — led by National Security Adviser John Bolton — has been trying to urge all countries to cut oil production from both Iran and Venezuela. The pressure has had an impact. India, which was one of the main oil purchasers from both Iran and Venezuela, has cut its buying from Iran. At the Baku meeting, Venezuela’s oil minister Manuel Quevedo said that Venezuela would no longer be exporting oil to India. This is a major declaration. U.S. pressure on India, one of the world’s largest importers of oil, will turn the screws against both Iran and Venezuela.

Iran has been under U.S. sanctions for decades. A brief window of opportunity opened with the Iran nuclear deal. U.S. President Donald Trump has annulled that deal and has tightened U.S. sanctions on Iran. In November 2018, the United States gave waivers to eight countries (including India and China) to continue to buy Iranian oil for six........

© Salon