Venezuela’s Oil Sector May Soon Have New Owners

Chinese and Russian state-owned oil companies “will probably market a significant share of PDVSA’s exports and operate an increasing share of its production, guaranteeing the repayment of their loans,” according to March report from the Atlantic Council. In other words, Venezuela will have to more or less hand over its oil to Chinese and Russian companies if it wants to sell any oil on the international market at all. Unfortunately, there are few good options. The U.S. is reportedly considering sanctions, although it is unclear when or what form those might take. While there is an urge to do something, sanctions would likely only deepen the misery in Venezuela, with uncertain odds of affecting change. Moreover, what is clear is that U.S. sanctions could knock even more oil production offline, significantly raising the odds of default, and potentially opening up Venezuela to more control by China. More…