The Organization of Petroleum Export Countries (OPEC) ended its meeting Monday without coming to a formal agreement about reducing oil production.
OPEC began flooding the global marketplace with oil in 2014. The group of oil-producing countries pumped out 31.3 million barrels per day by May 2015, the highest level of oil production since August 2012. As a result of the deluge, the price of oil on the barrel head fell from $107.5 in June 2014 to $45 in January 2015. Currently, the price per barrel of oil is just $46.93.
Many expected OPEC to reach an agreement Monday, and none hoped for a decision more than Venezuela.
The economy of the socialist nation is almost entirely dependent upon the oil industry, as it has the world’s largest oil reserves. Oil accounts for almost all of Venezuela’s exports, and comprises nearly half of its annual income. With little diversity in the nation’s economy, Venezuela is extremely vulnerable to declining oil prices.
Venezuelan President Nicolas Maduro began pleading with OPEC nations to reduce, or drastically limit, the amount of oil brought to market back in January, 2015. The socialist leader detailed the dire predictions experts projected for the nation’s economy if oil prices stayed low, and he even went so far as to claim that the oil glut was a conspiracy to try and cause an “economic collapse” in Venezuela. Maduro’s efforts were unfruitful, and OPEC continued to flood the market.
Maduro begged throughout 2015, contacting Iran, Qatar and Saudi Arabia directly to try to find common ground to defend stabilizing oil prices. He asked for an emergency meeting of OPEC members, but OPEC officials said that an emergency meeting was pointless, as outside producers (like Russia) were unlikely and unwilling to stop oil production.
A year later, in January 2016, Maduro wrote a letter to the 12 OPEC member nations requesting an emergency meeting once again to discuss the collapsing price of oil. Despite his tenacity, OPEC largely ignored the request.
As a result of this oil glut and the socialist policies instituted in the nation over the past three decades, Venezuela is in the midst of an economic collapse.
The Venezuelan people are fueled by disgust and hatred for the government — they are dying of treatable illnesses because even basic medical supplies are not there. In fact, one-in-three patients admitted to Venezuelan hospitals die.
Markets are barren, and food supplies are in the hands of the military. Malaria has ravaged the nation.
Inflation hit 480 percent in the nation in 2016 and is projected to be 1,600 percent in 2017. The International Monetary Fund predicts that the nation’s economy will shrink some 10 percent this year alone. (RELATED: Socialism Leads To Widespread Food Shortages And 1,600% Inflation In Venezuela)
Polling shows that 90 percent of Venezuelans think the nation is headed in the wrong direction, and two-thirds think that the president should leave office within a year.
OPEC’s next meeting is Nov. 30 in Vienna, and Venezuela will assuredly be awaiting the group’s decision with baited breath.
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