Maduro Says Oil Price Crash Is ‘Brutal Blow’ to Venezuela

(Bloomberg) -- Venezuela’s Nicolas Maduro said that a price war that’s sent oil prices to the lowest since 2016 is a “brutal blow” to the nation’s main source of revenue.

“I’m in contact with partners like Russia and other oil countries, to take the initiative in the coming days to begin a dialogue with OPEC and non-OPEC partners to find solutions,” Maduro said in a news conference from the presidential palace after days of silence on the matter.

The price war between Russia and Saudi Arabia will cut Venezuela’s oil revenue by $6 billion this year, according to consulting firm Ecoanalitica, which estimates 2019 oil revenue was $23.1 billion. Traders buy Venezuelan crude at a discount of about $20 to international benchmarks due to the complications of buying sanctioned oil, according to Francisco Monaldi, a lecturer at Rice University.

Earlier Thursday, the U.S. sanctioned a second subsidiary of Russia’s biggest oil producer, Rosneft PJSC, for allegedly helping transport Venezuelan crude oil. The subsidiary, TNK Trading International SA, was ramping up planned shipments from Venezuela after sanctions were brought against Rosneft Trading SA, the top buyer of Venezuelan crude last year.

U.S. President Donald Trump began escalating Venezuela sanctions in 2019 when he endorsed opposition leader Juan Guaido as the country’s legitimate leader. The South American nation depends on oil for more than 90% of much needed dollar revenue as the country finds itself a pariah of a global financial network.

“We have faced an economic war that has trained us,” Maduro said. “The economy has begun to self-regulate and that allows us to face this situation with greater capacity.”

To contact the reporter on this story: Fabiola Zerpa in Caracas Office at fzerpa@bloomberg.net

To contact the editors responsible for this story: Patricia Laya at playa2@bloomberg.net, Robert Jameson

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