Venezuela’s Complicated Crisis For Oil
The cold logic of the oil market dictates
that crisis usually equals profit. That’s because a crisis in oil usually means
a supply crisis, as some large producing country becomes embroiled in war or
civil unrest or sanctions or some other geopolitical mess.The country currently
occupying the unenviable position of being the likeliest source of a supply
shock is Venezuela. The collapse in oil prices has savaged the country’s
economy and brought political tensions to a head in the form of a
constitutional crisis, mass protests and, particularly over the past week or
so, looting and fatalities.From the oil market’s perspective, the question is
whether Venezuela’s intensifying problems will cause an outright collapse in
its production, currently running at about 2 million barrels a day. It’s a bit
more complicated than that, though.Venezuela’s supply has slumped already: More…
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