Oil Prices Affecting Venezuela's Oil Market

In recent months the oil prices have been lower than they use to be just a year ago. These prices have affected everyone differently. For example American drivers love the idea of paying a lower price in the gas they use and this is a shared feeling among most buyers, but oil producers, especially those in third world countries have been affected negatively. One of the countries that has been affected the most is Venezuela. Venezuela, the country with the biggest proven oil reserves in the world, has its oil market dominated by the state-owned oil and gas company, Petroleos de Venezuela S.A.. Venezuela depends heavily on their oil exports, 96% of the export revenues come from oil and used the Profits for public expenditure, including Social

Although the media has been emphasizing the fact that Venezuela has shortage of food, all markets, Product market and Resource market have been affected. In an article by BBC they interview two owners of small businesses and they explain how they haven’t been able to produce as much because they can’t get any parts or products into Venezuela. Although the law of supply states that as prices go up there will be more suppliers, in Venezuela this rule can be “bent” because although there’s people willing to supply it they can’t, because of Government

In order to keep supporting its Social programs, Venezuela could raise the price of Gas inside Venezuela and it wouldn’t affect the people very much because right now a Gallon of Gas is only about 5 American cents. The U.S has launched an investigation to find out if Venezuela’s leaders have used Petroleos de Venezuela to embezzle billions of dollars. In response the Venezuelan Government said these were false “claims from opposition parties working with U.S and other ‘foreign’ enemies’ to overthrow the Government” (IBT) .In recent days the President of Venezuela has been demanding an average Global oil price of $88 per barrel in order “to maintain investments worldwide”. Right now, Venezuelan oil costs $40, so in case the world listens to Maduro, Venezuela would start doubling its