Oil woes for Venezuela

Oil woes for Venezuela
11/23/2014 2:00 PM 11/23/2014 7:00 PM

The global market is playing a cruel trick on the troubled regime of
Venezuelan President Nicolás Maduro.

What's the latest drama? Well, the last time you gassed up did you pay
under $3 a gallon? That's bad news for the oil-rich Venezuelan
government, whose economy depends almost solely on oil exports.

Falling gas prices around the world, now at a four-year low, could
result in the lifting of government subsidies on gasoline inside
Venezuela, which has been a big savings for its citizens. The
combination of the end of the subsidies and the rise in the price of
gasoline inside Venezuela could have a devastating impact on consumer
spending in an economy already reeling from Mr. Maduro's erratic leadership.

Venezuelans suffer one of the highest rates of inflation in the world,
along with the scarcity of commodities, caused by poor governance and
lack of incentives to a business sector cornered by state policies.

And Mr. Maduro's popularity is in sharp decline and, according to the
results of various surveys, a majority of the population believes that
the country is in dire financial straits.

Worse yet, a dip in international oil prices could also reduce Caracas'
influence in Latin America. Venezuela has always garnered respect,
largely because of its oil resources in the hemisphere.

What we pay at the gas pump in Miami could also have an unexpected
impact on the world order in the region.

If Latin American countries that first received oil bribes from the
Chávez-inspired regime in exchange for political support no longer feel
the need to continue to rely on Venezuela's oil subsidies what happens next?

This would be a blow to the Bolivarian foreign policy, which requires
Mr. Maduro to prop up his power by maintaining confrontational rhetoric
against the United States and aggravating it with victories like its
recent election to a seat at the United Nations Security Council.

Miami is ground zero for the bad blood. Venezuela is said to be spying
on members of Florida's congressional delegation who have stressed their
opposition to Mr. Maduro's regime. There is no love lost.

Last week, two South Florida Democrats also warned President Obama of
Venezuelans continued flight, reminding the White House that they
continue to flee their country to the United States, many of them
settling in South Florida.

But Venezuela has a more pressing problem with its oil woes, which it is
not taking lying down. The country is turning to Russia, much like its
close friend, Cuba, did in the past.

Frustrated by Saudi Arabia's refusal to support a cut in crude
production, Mr. Maduro has made gestures to reach out beyond OPEC to
discuss ways to stop the recent decline in oil prices.

To make a point, Mr. Maduro announced he and Russia will meet Tuesday
with oil countries outside OPEC to discuss ways to prop up the price of
crude.

Meanwhile, OPEC will meet two days later in Vienna to decide on its
production goals.

To add insult to Mr. Maduro's regime, the U.S. and Canada have played a
role in the drop in oil prices in the region. Together they have
extracted more crude from shale and oil sands than they have in a
half-century.

Ironically, petroleum, which was the mainstay of populism for the late
Hugo Chávez, could now accelerate the decline of that model inherited by
Mr. Maduro, who, thankfully, has done a lousy job at preserving it.

Source: Oil woes for Venezuela | The Miami Herald -
<http://www.miamiherald.com/opinion/editorials/article4057889.html>