Will the Oil Keep Flowing in Venezuela?

Venezuela and other oil producing countries have still not managed to reach an agreement on oil production levels. This is more than a diplomatic spat. Without a pact, Venezuela may have to endure oil production interruptions later this year. Like many oil nations, Venezuela is trying to find a way forward in today’s new age of low oil prices and seemingly permanent oversupply. Currently the price is about $40 per barrel, but could easily slip further. Venezuela and other cash strapped countries want to prop up oil prices to keep revenues from dropping.
However Osio says, “Venezuela has a second problem”. Despite having Earth’s largest oil reserves, the nation is energy-starved according to an article shared on his About.me page. Limited investment in power generation means Venezuela is chronically short on electricity. Depending on reservoir water levels and the resulting generating availability for hydroelectricity, the country could be forced to divert oil to power production. That may result in disruptions of the oil supply. Stabilizing production levels with an international agreement will go a long way towards keeping that oil flowing in Caracas later this year.