Self-declared Venezuelan President, Juan Guido, named the interim board of directors for two of the country’s most critical, state-run oil companies: PDVSA and Citgo, the U.S.-based refineries of which are the major source of dollar revenue for the struggling nation.
While Maduro still claims control of government institutions in Venezuela, including the armed forces and PDVSA, Guido is trying to get support from the U.S. and take control of Venezuela’s major assets abroad.
Citgo’s case is becoming further complicated with regard to the company’s shareholders. Russia’s biggest oil company, Rosneft, has shown interest in Venezuela’s oil industry and now holds 49.9 percent of Citgo’s equity as collateral loan to PDVSA.
Despite the fact that it is still unclear how Guido will take control of the companies, it seems that there’s no choice for Venezuela’s economy other than a deal with the U.S. Exports of crude petroleum make up about 80 percent of total exports for Venezuela, followed by refined petroleum, which accounts for about 10 percent. The U.S. is the biggest trading partner for Venezuela. Total trade between the two countries make up $15.9 billion, followed by $9.2 billion with China.
Oil production in Venezuela has collapsed over the past three years due to the country’s ongoing economic crises. Since the U.S. imposed new sanctions, Venezuelan officials have been seeking out other markets for their oil exports in order to maintain revenue inflow.
U.S. officials have stated that the sanctions on Venezuela could be lifted if pro-Guido troops come to power: “The U.S. will consider sanctions, off-ramps for any Venezuelan senior military officer that stands for democracy and recognizes the constitutional government of President Juan Guaido. If not, the international financial circle will be closed off completely. Make the right choice!” said National Security Adviser John Bolton on Twitter.
Does Venezuela have the choice?