And Nicolás Maduro has returned to Venezuela. Triumphant from his global tour aimed at supposedly “strengthening the market.” My sources inform me that certain high-level public employees received explicit orders to attend the welcoming event, which will likely be followed this week by a “massive” demonstration in Caracas, comprised of people forced to attend in the required red attire. The tour was a huge success, reported only as such in the channels of the chavista communication hegemony. As of the writing of this piece, there isn’t a single mention of the touted “success” in independent media on Google News. But let’s take a moment to consider how we can interpret this “success”: Did the Venezuelan presidential delegation achieve any measures in the visited countries that could alter the fundamental factors affecting prices? Did Putin or Al Naimi promise any production cuts? Has the price of oil returned to 100 dollars per barrel?
Maduro was not alone. He also took, besides his family, Asdrúbal Chávez, the Minister of Popular Power for Oil and Mining of Venezuela, and currently, perhaps the top figure at Petróleos de Venezuela. They visited Russia, which will keep producing as much as it can because, apart from the hardships of its currency, it has to deal with the declining income from hydrocarbon sales, which is being mitigated by increasing production. They visited Saudi Arabia, which is in almost impeccable operational and financial shape, and is still waiting patiently for the shale oil producers in the United States to become economically unviable. Iran, another traditional ally of chavismo, has also increased its production and just stated it will not cut back, while Iraq is producing over four million barrels per day. They visited China, which has seen reduced economic growth in recent months and whose government has been a keen observer of Venezuela’s mismanagement of resources, showing no intention of continuing to give money to chavismo unless the conditions are absolutely stringent.
So, what “success” are they talking about? What real possibility exists for Russia, Saudi Arabia, or Iran to modify their energy and macroeconomic policies to favor the shaky chavista regime, when these countries know better than anyone that the market is saturated with approximately two million barrels per day, and yet they are pumping more oil than ever? Why would China, taking advantage of low prices to fill its reserves at a fraction of the cost, let the opportunity to save billions pass by? In other words, when it comes to “strengthening the market” -and let’s enjoy the irony of the chavista regime speaking in capitalist terms- how is that achieved? What might the new Minister of Foreign Affairs, Delcy Rodriguez, have said in the meeting with Al Naimi? Are these people seriously talking about “success” in bolstering capitalism?
In the US, now the second-largest producer in the world and one of the biggest consumers, discussions are already underway concerning the Federal Reserve potentially activating certain mechanisms to protect the local industry. Furthermore, the Department of Commerce is already approving applications for the export of light crude, which is estimated to add a million barrels per day to the already saturated global market. Has Maduro managed to convince anyone in any of the countries he visited to ignore this reality, abandon their respective economic positions, and submit to requests that will ultimately benefit mainly US producers?
Now that would truly be a success. We shall continue to read the media allied with chavismo, waiting for the good news.