The future of the Petrocaribe Initiative, one of the backbones of Venezuela’s so-called “oil-diplomacy” is at the forefront of discussions following the results of the legislative elections in the country, as reported in Diario Libre.
Petrocaribe was set up 10 years ago as a way of helping the Caribbean region, especially Cuba. The initiative allowed countries to postpone making payments on their oil bills when crude oil prices were double today’s prices.
However, the gradual fall in crude oil prices since 2014 and the victory of the opposition in the recent legislative elections in Venezuela are bringing the program into doubt because in principle it appears that the low prices are not going to disappear. A senior analyst at Moody’s, Jaime Reusche told Spanish news agency EFE that he sees “a pretty complicated future” for Petrocaribe, which currently benefits 18 nations in the Caribbean basin.
According to the analyst, over the last two years they have been seeing a reduction in shipments of crude that are carried out under the Petrocaribe umbrella, which conceded credit advantages according to the price level of crude oil.