Falling oil prices within the last few months have sparked a series of reports in regards to which countries are strong contenders and which should bow out of the oil business gracefully. Though heavy-hitters like Russia and Iran are struggling, Venezuela is truly suffering.
The oil industry accounts for over 95% of Venezuela’s export income and more than half of the government’s revenue. The steady drop in global oil prices from over $110 a barrel during the summer to the current rate of under $70 has created rumors about a possible government fallout or a Venezuelan sovereign default.
The world’s two largest oil exporters and Venezuela’s most prized oil trade and investment partners — the United States and China — sit comfortably on the other side of the dropping oil price spectrum. While the U.S. has slowly weaned itself off of Venezuelan oil and China has become intrinsically linked to Venezuela’s petro-state through finance and trade, Venezuela’s dire situation offers potential for China and the U.S. to join forces in order to create a more sustainable oil policy in the South American country.
Government officials in both Washington and Beijing are newly committed to collectively addressing climate change, cooperating in order to create more environmentally friendly agendas. Venezuela’s worsening crisis presents the opportunity for both superpower’s leaders to work together in order to evaluate the environmental impacts of the country’s extra-heavy crude oil, in addition to assisting Caracas in creating a more stable and sustainable economy.
Technological advances have significantly expedited international business communications via virtual offices, which merge the flexibility of working on one’s own schedule and terms with the professionalism of a traditional, brick-and-mortar office space. If the U.S. and China move forward with a collaboration, they would most likely maintain both a physical and virtual presence in Venezuela.
The world’s largest oil reserves are found in Venezuela, the vast majority of which is extra-heavy crude oil found in the Orinoco Basin region. This location creates especially high financial and climate costs due to upstream and downstream processing.
Despite having nearly unrivaled petroleum resources as well as high prices since the 2000s, Venezuela’s economic climate, societal distress, and political upheaval have become increasingly volatile and polarized. However, the oil crisis presents the opportunity for positive change.