Editorials

Oil woes for Venezuela

Milagro Alvarez holds her 5-month-old daughter as she waits in line outside a pharmacy in hopes of buying disposable diapers in downtown Caracas. Diapers are rationed. Falling oil prices are causing more misery to millions of Venezuelans, whose country depends almost exclusively on oil revenue.
Milagro Alvarez holds her 5-month-old daughter as she waits in line outside a pharmacy in hopes of buying disposable diapers in downtown Caracas. Diapers are rationed. Falling oil prices are causing more misery to millions of Venezuelans, whose country depends almost exclusively on oil revenue. AP

The global market is playing a cruel trick on the troubled regime of Venezuelan President Nicolás Maduro.

What’s the latest drama? Well, the last time you gassed up did you pay under $3 a gallon? That’s bad news for the oil-rich Venezuelan government, whose economy depends almost solely on oil exports.

Falling gas prices around the world, now at a four-year low, could result in the lifting of government subsidies on gasoline inside Venezuela, which has been a big savings for its citizens. The combination of the end of the subsidies and the rise in the price of gasoline inside Venezuela could have a devastating impact on consumer spending in an economy already reeling from Mr. Maduro’s erratic leadership.

Venezuelans suffer one of the highest rates of inflation in the world, along with the scarcity of commodities, caused by poor governance and lack of incentives to a business sector cornered by state policies.

And Mr. Maduro’s popularity is in sharp decline and, according to the results of various surveys, a majority of the population believes that the country is in dire financial straits.

Worse yet, a dip in international oil prices could also reduce Caracas’ influence in Latin America. Venezuela has always garnered respect, largely because of its oil resources in the hemisphere.

What we pay at the gas pump in Miami could also have an unexpected impact on the world order in the region.

If Latin American countries that first received oil bribes from the Chávez-inspired regime in exchange for political support no longer feel the need to continue to rely on Venezuela’s oil subsidies what happens next?

This would be a blow to the Bolivarian foreign policy, which requires Mr. Maduro to prop up his power by maintaining confrontational rhetoric against the United States and aggravating it with victories like its recent election to a seat at the United Nations Security Council.

Miami is ground zero for the bad blood. Venezuela is said to be spying on members of Florida’s congressional delegation who have stressed their opposition to Mr. Maduro’s regime. There is no love lost.

Last week, two South Florida Democrats also warned President Obama of Venezuelans continued flight, reminding the White House that they continue to flee their country to the United States, many of them settling in South Florida.

But Venezuela has a more pressing problem with its oil woes, which it is not taking lying down. The country is turning to Russia, much like its close friend, Cuba, did in the past.

Frustrated by Saudi Arabia’s refusal to support a cut in crude production, Mr. Maduro has made gestures to reach out beyond OPEC to discuss ways to stop the recent decline in oil prices.

To make a point, Mr. Maduro announced he and Russia will meet Tuesday with oil countries outside OPEC to discuss ways to prop up the price of crude.

Meanwhile, OPEC will meet two days later in Vienna to decide on its production goals.

To add insult to Mr. Maduro’s regime, the U.S. and Canada have played a role in the drop in oil prices in the region. Together they have extracted more crude from shale and oil sands than they have in a half-century.

Ironically, petroleum, which was the mainstay of populism for the late Hugo Chávez, could now accelerate the decline of that model inherited by Mr. Maduro, who, thankfully, has done a lousy job at preserving it.

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