This country has largest oil reserves in world yet remains poor, facing highest inflation due to…, not Iran, Kuwait, Brazil, or Oman, its name is…
The United States, which has been dealing with drug-related challenges, has announced a a military operation against South American drug cartels. This is probably the first time that any country has deployed military to deal with the drug cartels. US has deployed US warships and maritime patrol aircraft to keep an eye on territorial waters of South American countries. On September 2, the US Navy carried out a missile attack and destroyed a Venezuelan boat, killing 11 people. In its defence, Washington stated that Venezuelan boat was laden with drugs. This has created tensions among US and Venezuela. However, this is not the first time that relations between the two countries have deteriorated so much.
Does US Have A Complicated Relationship With Venezuela?
It is to be noted that this is not the first time that relations between the two countries have deteriorated to this extent. The South American country has had a complicated relationship with the US, affected by oil, politics and securities issues.
How Much Oil Does Venezuela Have?
Venezuela holds the world’s largest proven oil reserves, as per a report by Al Jazeera. Despite sitting on world largest oil reserve, the country is able to earn a small amount of money from crude oil export. As per a report, Venezuela had an estimated 303 billion barrels of oil reserves by 2023. Saudi Arabia holds the second position with 267.2 billion barrels of oil reserve. The third and fourth position is held by Iran (208 bbl) and Canada (163 bbl). These four countries have more than half of the global oil reserves.
HIGHLIGHTS
- US launched a military operation against South American drug cartels. The country has deployed warships and patrol aircraft near regional waters.
- On September 2, a US Navy missile strike destroyed a Venezuelan boat, killing 11 people.
- Venezuela, despite holding the world’s largest proven oil reserves (about 303 billion barrels), earns limited revenue due to heavy, high-sulphur crude.
- In 2023, Venezuela exported only USD 4.05 billion in crude oil.Why Venezuela’s Crude Oil Sells At A Low Price?
Notably, the country’s oil reserves are mainly located in the Orinoco Belt. It is a vast area which is spread over 55,000 square kms in the eastern part of the country. The region also has heavy crude oil, which is very viscous and dense.
However, it is much more difficult and expensive to extract than conventional oil and latest technologies are required to produce oil in this region. Due to the high density and sulphur content in crude oil, this Venezuelan oil sells at a lower price than crude oil from other countries.
How Much Oil Does Venezuela Export?
As per the Observatory of Economic Complexity (OEC) report, Venezuela exported only USD4.05 billion worth of crude oil in 2023. This export is nothing as compare to other major players, including Saudi Arabia (USD181 billion), the US (USD125 billion), and Russia (USD122 billion).
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