Biggest source of news for Venezuela today? Lausanne

Lausanne_Switzerland_03z-1I have a pretty busy day today, but keep an eye out for what is happening in Lausanne in the negotiations between the world’s powers and Iran. Apparently, there are high probabilities that a deal may be reached.

If an agreement is reached, even a faulty one, Iran may be allowed to increase its presence in world oil markets. The extent of the agreement may also have repercussions on the unfolding (non-)scandal involving the dangerous liaisons between Iran and Venezuela.

Venezuelans may be too busy navel-gazing to realize it, but what happens in Lausanne today may have important consequences for us.

32 thoughts on “Biggest source of news for Venezuela today? Lausanne

  1. Lausanne, or no, barring Mid-East conflagration, the near-/mid-term future for oil pricing is not good, with WTI under $50, and an estimated U. S. shale oil 3 million bbl/ shut-down, but re-activateable in only a few months when prices go up.


      • This is of course another reason for the Chabrutos to stay power as long as possible, and get filthy rich.

        If you’re one of the Hundreds of Thousands of top Enchufados in Corruptzuela today, you will want your piece of the cake, for an exuberant retirement of all your family in Europe, ASAP.

        If you read a bit, you know that Oil prices are gonna bounce back in a few years. Thus, you start thinking: do whatever you can to weather the storm right now, until you can start bribing people again, and borrow from the Chinese again to buy some Trigo, meat and papel toale..

        1/ Thus, you crack down or Repression with bogus fears on an Empire Invasion and blacklist a bunch of people ( “enemigos de la rebulusion que no firmaron contra Obama)

        2/ Thus you ensure the next elections, using Chavez’s Fraudmatic tool to get 55%.

        In contrast, for the MUD and for the good of our people, this may be the last opportunity to THROW OUT this Dictatorship, by FORCE in the streets, after the next elections’ fraud is perpetrated in obvious manner.

        While the crisis is at its worst, and the oil at its lowest, no more credit, no more harina pan, el pueblo arrecho.

        If we don’t seize this opportunity during the next 5 years, and oil prices go back to $100, while the Repression has tightened, we may very well be the next 50 year old miserable dictatorship : Cuba 2.


        • Oil prices are not going to bounce back by 2020 or anything or any time horizon. They are most likely going to oscillate around $50 or $60 a barrel. They may even oscillate pretty wildly and go above $100 a barrel for short periods of time, a few months or so, before falling down again, just as well as cratering for a little while before springing back up, depending on many short term factors (financial markets, geopolitics, economy, etc.) and slightly longer term fundamentals.

          But, baring Saudi Arabia or Russia going completely off-line for an extended period of time, a protracted civil or international war, the days of long boom-bust cycles are probably over. And even war or revolution may not stop the flow of oil, as seen in Syria and Iraq, where production keeps going, even in combat zones. Belligerents are like anybody else. They need to pay their bills and they are not going to blow up (too much of) their best source of income. Oil fields and infrastructures are military objectives to be captured as intact as possible, not utterly destroyed.

          The reason for that is shale oil, not so much because of its own production volume, which isn’t that huge, but because of what it’s currently doing and will increasingly do to the rest of the oil market. Shale oil has introduced a highly reactive marginal producer, operating on time horizons of about one to two years, very short compared to the previous “natural period” of oil markets. And that’s radically altering the mid to long-term outlook.

          Markets know it and are already taking it into account, And that’s why they are acting so cool right now, despite pretty insane inventory levels. Instead of that, they are just building more storage. If the current shale oil output in the US was instead coming from conventional fields with a long production tail, WTI would be currently trading at $20 right now. But it’s not. It’s trading at $47 because the markets know that excess production is going to disappear fairly quickly. And it will work in the same manner on the way up, as a strong damper, because markets know that as soon oil is trading above $70, new production will get on-line within 6 to 12 months. So any price spike will be short-lived.

          And it’s cascading into other non-shale producers, who now know that oil prices are going to be fairly strongly pegged in the coming years by the marginal cost of new US production of shale oil. So they can plan their own longer term developments accordingly.

          And as for the Boligarchy, it means that if they hope they can hold their breath until the good ol’ days of long-term $100 oil are back, they are going to croak with a very blue face.


      • 2020 is long-term for me/oil markets. In theory, even if $100 by then, most normal govts. would have long fallen, given Venezuela’s high Misery Index. But, it seems that the threshold for pain of the Venezuelan Petro-State Peons is unimaginably high, and, with 3m or so Ven. military in Govt. positions (as in Cuba, no coincidence), there may not be any near-term help coming for Venezuela’s citizenry. A good example of laxity/conformism/submission is the lack of public outcry for the jailing of Ledezma, voted in by 700m or so citizens, none of which took to the streets to complain.


        • I don’t know, but it’s easy to judge them from afar.

          I can’t speak for anyone else, but if I were in Venezuela right now and facing food scarcity + out of control inflation + political repression from government’s apparatus + queues to find medicines + plane tickets getting rarer and rarer = impending doom, THE LAST WORRY/PRIORITY IN MY LIFE would be with Ledezma’s arrest. Specially if I had a family to take care there.


            • The thing about Venezuela is that there’s no strong middle class leading the way. The difference between Venezuelan society and society in a country like, say, Argentina is huge. If the 1 million+ educated, well-fed, rich, health insurance covered Venezuelans abroad returned to Venezuela, transition back to democracy would be so much faster.


              • There’s probably about 3 Million of us Venezuelans who left the country because of Chavismo, the threat of getting killed for a pair of shoes, and/or the impossibility of doing honest business. 99% of that are middle/upper class, educated people, professionals..

                So you are right: most of what’s left are the uneducated, lower class and/or the under-educated, corrupt enchufados, the Chavistas, the military enchufados.. Very, very few good, honest, educated Venezuelans left in the country. And they are threatened to be in jailed, killed or robbed of their properties/businesses if they say or do anything against the system. (Plus the new “black list” being created as we speak!!)

                The poor/uneducated have no clue of what’s up in the world, plus they were always ignored by Adecos/Copeyanos for decades, while now at least they get Freebies left and right..

                That’s nothing new: Authoritarians always ensure this type of “Brain Drain” and witch hunt of sorts, they kick out all dangerous elements of society, one way or another. And they “grease” the rest, Millions are Corrupted by $$$.

                So yes, we’re in deeeeeeeep shit now.


              • The importance of a middle class with enough numbers and militancy to defend its values can never be understimated , and yet we now live in a system that practices a kind of repressive apertheid which methodically and drastically suppresses and excludes that middle class and in fact any polential adversary from effective participation in the countrys institutional political life . If you are fighting a dug in apertheid system controlling all institutional manifestations of political activity and only leaves you a tiny space in which to make believe that you have some symbolic presence in the political life of the country there is not much you can do except perhaps challenge the institutions themselves in a non institutional way . Most people in this country balk at doing that and maybe dont feel prepared for the kind of violent struggle that involves . The regime itself is ruthless in way that makes any ordinary protest or opposition a punishable crime . its the national conundrum . I suspect once th e parlaimentary elections are held a rubicon will be crossed which will tell people ( depending on how the regime handles it) what route they can follow to get their freedoms back. Until then little will be done to define things !!


  2. If an agrement is reached sanctions on Iran will (at least in part) be lifted meaning that much of the oil it has in storage or is now holding from full production will flood their natural markets in India and the far east lowering prices and making the sale of venezuelan crudes to those markets more difficult .

    This might be great news for world peace but awful news of the regime which sells some 800 kb/d plus of Venezuelan production to markets in India and the far east. Lets remember that if far east prices fall and we are selling to the far east those prices will drop and that having India as their next door neightbor will make the supply of iranian crude more attractive to India than bringing it via a long long voyage from Venezuela .


    • That would be great news for all, except Chavistas in power.

      Unfortunately now, the worse the Corruptzuelan economy gets, the more pissed off people get, the better our chances for a Coup, to topple the Regime before it’s too late. Now may be the last last chance before long.


      • A ‘coup’? The current regime is illegimate and a dictatorship, certainly, but who would pull off a coup? The utterly corrupted and complicit armed forces who get all the privileges while the rest of the country goes without? A coup is not the word for what will happen. More like a chaotic, violence collapse as the regime has to eventually use armed forces to attack their own barrios, leading to violent and open splits, chaos, and ultimately some sort of emergency, caretaker, unity government of PSUV and oppo figures.

        Honestly, it’s hard to envision a way out of this. Yes, people will get more pissed off, and the regime will have to resort to more scapegoats to blame…I fear the next stage in this is ‘people’s justice’ where the brainwashed masses are encouraged to take matter into their own hands and vent their anger and frustration on the squalid ones.


  3. Marc you are so right! I’ ve spent the whole morning looking for meat and chicken!!! I even went to Rey David which is a very very very expensive deli/boutique where only the 0.01 of the population can afford to go… No meat no chicken… I’m well educated, post graduate studies, some could say I’ m high class although I feel very low class and not sorry to tell you the last thing in my mind right now is Ledezma… I need to provide for my cachorros …


  4. “That’s why democracy with this type of populace doesn’t stand a very good chance….”

    Right.. I know what you mean, but don’t say it out loud!


  5. a cheap oil is the best news possible for a country some involved in navel-gazing as Venezuela (Maduro’s government being only a representative sample of the navel-gazing population). It means that it will force the symbolic head of the nation to be rushed out of the figurative anal orifice. Diversification of the economy FTW

    You know what, if the barrel hits 40$, I’m going to have some fine and expensive bubbly wine, just to celebrate


  6. O.T.: The news today has me depressed.

    Today, in Nigeria, a country recognized as one of the most corrupt and dysfunctional in the world, held an election. The incumbent lost and has already conceded and called his opponent to congratulate him!,0,6357084.story

    Meanwhile, in Venezuela, we get the story of government employees being fired for refusing to sign Maduro’s petition. If this government would stoop to such pettiness and blatant political coercion over a silly and meaningless petition, how far will they go to win an election to maintain controls of the National Assembly?


  7. Diversification of course is most desirable , but next best to it is having a well run oil industry , if our current indsutry wasnt so wasteful , corrupt and inept , if it were any were as competent as it used to be, it probably would be able to supply the country a very decent income .!! enough to avoid many of the disasters that have now befallen us.


  8. The only “diversication” we know of in Corruptzuela is of the Financial Laundromat variety: From bank to bank, country to country: “una lavaita en Suiza, otra en Andorra, paso por China, despue pa Panama…”


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