Hugo Chavez's Oil Embargo Economic Crisis

Venezuela was once one of the most prosperous nations in Latin America and now it is in the grip of a political, economic, and humanitarian crisis as a result of corrupt policies and government overreach of Nicholas Maduro, the president of this country. The economy of one of the counties that holds the largest supply of oil in the world is collapsing, and this catastrophe might negatively impact the United States and the world as the price of the oil can become volatile. For that Reason, the U. S. government is already taking actions. One of the options being considered is an oil embargo and several economic sanctions since the Maduro government depends on its oil trade with the United States to survive. However, the sanctions imposed by the

Food and medicine shortages are the cause of a humanitarian emergency. To worsen the situation, the President Maduro called for an Assembly to rewrite the constitution of this country to hang onto power and this was installed in August. For several years, Venezuela was controlled by a small elite and this led to an extreme gap between the rich and the poor. In 1999, Hugo Chavez was elected on the promise of sharing the immense oil wealth of this country with the poor . For this reason, he enacted several policies to meet this goal such as the nationalization of part of the economy, and this forced May companies to flee the country. A significant number of Venezuelan Citizens became dependent on the social programs created by Chavez. All of this programs were fueled with the income generated by the oil sector. However, there was a fall in crude oil prices and today is trading at about $ 50 a barrel, which is half of the cost of a Barrel when Chavez was the president . Thus, the current emergency is the result of an economic crisis brought on by the fall in oil prices and the undermining of the democratic institutions in this country. This crisis could affect not only neighboring countries but also the United States and the world due to the role that Venezuela plays as an important oil supplier in the

For that reason, President Donald Trump imposed economic sanctions on Venezuela two months ago to punish president Maduro for the repressive policies in this country. The sanctions consist on restricting trading of Venezuelan bonds that are sold by Maduro’s government in the American financial markets as way to raise money . As a result, it is likely that the Venezuelan government will have a default on its debts in the next months. In addition, according to Anthony Faila, a Bureau chief for The Washington Post, “With the collapse of much of the country's industry during its socialist experiment, oil now accounts for about 95 percent of the value of all Venezuelan exports.” Moreover, this country also needs to import light crude from the United States to process its thick and rough oil for export. For these reasons, the Trump administration is considering a potential oil embargo; in other words, they want “to go for the economic jugular.” However, this type of embargo cannot come without serious