Friday, March 27, 2015

Venezuela slashes oil shipments to Cuba, Caribbean in half

Venezuela slashes oil shipments to Cuba, Caribbean in half
03/26/2015 6:10 PM 03/26/2015 7:19 PM

Venezuela has cut in half its subsidized shipments of crude oil to Cuba
and Petrocaribe member nations to 200,000 barrels per day, down from
400,000 shipped in 2012, a Barclays report says.

Also, the British investment bank's report considered it "ironic" that
Venezuela would ship any oil at all, highlighting that while the country
is going through extreme difficulties, it continues to subsidize oil
sales to countries that have healthier economies.

Because of the cuts in oil shipments to the Caribbean, the firm reduced
its deficit forecast for Venezuela to $22.6 billion, down from more than
$30 billion predicted for 2015.

"The oil agreements have been a heavy burden for Venezuela. These
deliveries reached 400,000 bpd at their peak in 2012, though Venezuela
only received payment for 200,000 bpd," said the Barclays report, citing
figures from Petrologistics, the firm that follows tanker movements. "In
the last decade, the agreements have cost Venezuela up to $50 billion,"
added the report, titled Reducing Generosity.

Surprisingly, Cuba, the most important ally of Nicolás Maduro's regime,
has not been exonerated from the cuts, which deepened after August 2014,
when crude-oil prices began to drop.

"Cuba has received about 55,000 barrels per day since September, nearly
half of what it received in 2012," the report says.

The cuts in deliveries to Cuba are more important than those of the
other countries benefiting from Venezuela's generosity, because unlike
member countries of the Petrocaribe program, which at least pay a
portion of the deliveries, Havana's regime does not make cash payments
for the exchange.

Under the cooperation agreements in place between both countries, Cuba
pays for oil with the services of doctors and sports trainers for the
social programs launched by the Venezuelan government, as well as with
the island's intelligence services.

However, shipments to Petrocaribe member countries have also been
reduced significantly.

Shipments to the Dominican Republic and Jamaica, which account for about
half of the program, have dropped 56 percent and 74 percent compared to

Venezuela, which had recently enjoyed one of the most pronounced and
prolonged oil bonanzas in its history, is now immersed in one of the
worst economic crises due to the systematic destruction of the national
production structure and the dramatic plunge of oil prices, economists say.

Venezuelans, who today face a scarcity index of more than 50 percent,
are forced to spend hours in food lines to enter supermarkets with
half-empty shelves.

Source: Venezuela slashes oil shipments to Cuba, Caribbean in half |
Miami Herald Miami Herald -

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