LONDON, United Kingdom — US sanctions against Venezuela’s national oil company risk raising crude prices owing to a drop in exports of so-called heavy crude on which the world depends.
Washington’s move against PDVSA on Monday is aimed at crippling embattled President Nicolas Maduro’s power base.
Although crude output by OPEC member Venezuela has slumped in recent years, its heavy crude oil is sought after by US refineries who mix it with lighter crudes to make petrol. Prior to the US announcement, oil kingpin Saudi Arabia had already warned of the impact of Venezuela’s political crisis on the crude market.
“Of course, developments in Venezuela may have an impact on the markets… We are watching developments there, and there could be an impact on the oil market balance,” Saudi energy minister Khalid al-Falih tells Al-Arabiya news channel.
Oil production in Venezuela has slumped in recent months from more than two million barrels per day to around 1.4 million bpd amid the country’s political crisis. The Latin American nation sits on the world’s largest oil reserves of more than 300 billion barrels, most of it heavy crude.
— AFP
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