Venezuela forced to lower its oil prices due to US sanctions | FREE NEWS

Venezuela forced to lower its oil prices due to US sanctions

Revenues from oil exports have declined significantly in recent years, the newspaper said.

US sanctions force Venezuela to sell its oil at reduced prices. The Financial Times reported.

According to her, Venezuela used to import naphtha (the product of oil distillation) from the United States and mix it with its oil. Such modified oil sold at $7 per barrel cheaper than Brent, which is currently trading at about $60 per barrel. However, after the introduction of US sanctions, Venezuela was forced to create a cheaper brand of oil called Merey 16, which costs $15-17 cheaper than Brent but is in demand in markets in Asia and Russia.

The publication notes that revenues from oil exports have declined significantly in recent years. According to the estimates of Igor Hernandez, a professor at the IESA business school, quoted by the newspaper, currently, oil exports bring about $ 250 million per month to the country’s budget, while in 2005-2014 this figure was about $5.3 billion per month.

In addition to problems with the supply of naphtha, Venezuela also does not have enough ships to transport hydrocarbons, because shipowners are afraid to fall under US sanctions for helping the Republic. In the circumstances, notes the Financial Times, the state oil company PDVSA all profits are forced to give “Rosneft” to repay the debt. According to the latest data, PDVSA reduced its debt to “Rosneft” to $0.8 billion by September 30. At the end of the first half of the year, the volume of debt was $1.1 billion.