Guyana, a tiny South American nation home to more than 800,000 people, made big headlines in December.
The reason? Its neighboring country, Venezuela.
A cold snap in the U.S. and continued attacks on ships in the Red Sea have boosted bullish sentiment in oil markets, although increasing product stocks could counter that narrative.
For the next decade, Latin America is likely to maintain its predominant role in the oil sector. Unlike past years, it can now count on Venezuela’s return to international markets, as the Biden administration has decided to lift the sanctions in force since 2019. This decision is mainly conditioned on the holding of transparent and democratic elections by 2024. This agreement will allow Venezuela to exploit its immense resources, represented by 303 billion barrels and over 5 billion of cubic feet of natural gas, ranking as the largest reserve in the world. Major international companies are already looking to seize this opportunity, including Eni and Repsol, which are currently finalizing the details of a contract with Petróleos de Venezuela Sa (Pdvsa), the state-owned company. As reported by Bloomberg, negotiations are at an advanced stage, and an agreement is expected to be reached by the end of the month.
The escalating Venezuela-Guyana dispute could provide an opportunity for the AUKUS alliance to intervene in the region and counter the influence of China, Russia, and Iran.
US Southern Command has conducted joint operations with the Guyana Defense Forces and the U.S. has said it would support Guyana’s sovereignty.
Geopolitical maneuvering by China, Iran, and Russia has fueled tensions in the region, and with a presidential election looming in Venezuela, the stakes are only getting higher
Benchmark Brent averaged around US$80 a barrel this year, after a volatile 2022 in which prices surged above US$100 after Russian supplies were disrupted following the Ukraine war
Eni SpA E and Repsol SA REPYY are engaged in advanced negotiations for new agreements with Venezuela, as the South American nation aims to reclaim its position as a significant global oil producer following the relaxation of U.S. sanctions, per a Bloomberg report.
President Nicolas Maduro announced annexation of Essequibo and mobilized army at the border
Oil prices have nearly erased all year-to-date gains as shrinking refining margins signal weaker demand for oil.
The governments of Venezuela and Trinidad and Tobago have struck a profit-sharing agreement that will allow them to jointly exploit the Dragon gasfield, with Trinidad exporting natural gas from the PDVSA project.
In less than a decade, the economy of what was once South America’s wealthiest country, Venezuela, collapsed. The oil-rich country, which once pumped over three million barrels of petroleum daily, slumped into the worst economic collapse of modern times to occur outside of war.