Oil price rout forces Venezuela to rethink petro-diplomacy

The International Monetary Fund last year recommended that Venezuela, given its “external liquidity constraints, including a continued fall in international reserves, could choose to reduce or eliminate these schemes”. Some Petrocaribe countries have made contingency plans and analysts have recommended they switch to cheap US shale gas instead. Guatemala has withdrawn from the scheme, Jamaica and the Dominican Republic have reportedly securitised past Petrocaribe debts owed to Venezuela via Goldman Sachs, while Cuba — Venezuela’s closest ally — has begun talks to re-establish US diplomatic relations. More…