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No Place to Hoard! Venezuela Reportedly Selling Oil for Less Than $5 Per Barrel

© AP Photo / Fernando LlanoIn this Feb. 18, 2015 photo, storage tanks stand in a PDVSA state-run oil company crude oil complex near El Tigre, a town located within Venezuela's Hugo Chavez oil belt, formally known as the Orinoco Belt
In this Feb. 18, 2015 photo, storage tanks stand in a PDVSA state-run oil company crude oil complex near El Tigre, a town located within Venezuela's Hugo Chavez oil belt, formally known as the Orinoco Belt - Sputnik International
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In 2018, the US introduced economic sanctions against Caracas in attempt to oust President Nicolas Maduro. This development and global price-related factors had a dramatic effect on the country’s oil industry, which now has stored an excessive amount and is approaching capacity.

Venezuela has begun to sell oil for less than $5 per barrel, El Nuevo Herald revealed, citing experts in the industry familiar with the development. Meanwhile, the price of Brent crude oil was set at approximately $25 per barrel as of 27 March.

According to the experts cited by the outlet, Venezuela has been hard hit by US sanctions, the ongoing coronavirus pandemic and economic disagreements between Russia and its OPEC+ partners. Russ Dallen, managing partner of investment bank Caracas Capital Markets, told the newspaper that “nobody wants to touch” Venezuelan oil to avoid being sanctioned themselves by the Trump administration.

The country has been forced to hoard oil without being able to openly sell it on the market, and has cut production to some 450,000 barrels per day. According to reports, although the nation keeps up an extensive oil trade with Cuba, cutting the price of its crude to attract new buyers may be the only option left for Caracas.

In 2018, a number of economic sanctions, including those affecting the national oil industry, were introduced against Venezuela by the Trump administration in an effort to oust incumbent President Nicolas Maduro.

Venezuela's President Nicolas Maduro speaks during a news conference at Miraflores Palace in Caracas, Venezuela, March 12,  - Sputnik International
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Washington has since imposed a number of sanctions on companies alleged to be doing business with Venezuela-related oil companies, most recently adding TNK Trading International S.A. to the list.

The Trump administration consistently asserts that the current president of Venezuela's National Assembly, Juan Guaido, is Venezuela’s leader, while recently bringing drug trafficking charges against Maduro and offering a sizable reward for his capture.

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