By Nicholas Cabrejos (Policy Analyst)
The South American country of Venezuela is currently experiencing extreme inflation and massive food shortages. Venezuelan president Nicolas Maduro took power after the death of former president Hugo Chavez, and since then Venezuela has experienced large numbers of citizens fleeing to neighboring countries. Similar to Mexico in the past, Venezuela relied almost completely on the exportation of petroleum; the falling prices of petroleum and corruption in government have greatly impacted the lives of Venezuelan citizens.
In 2016 Venezuela provided approximately 8% of the petroleum imported into the United States. Petroleum exports make up almost all the money made from Venezuelan exportations, which makes this country completely reliant on this one resource. Some analysts claim that the falling price of oil has caused Venezuela’s economy to experience a massive inflation crisis, while opponents of this opinion claim that this crisis was caused by the country’s socialist regimes led by former president Hugo Chavez and current president Nicolas Maduro
The US has recently applied new sanctions on 13 Venezuelan senior officials in response to allegations of “human rights abuse, undermining democracy, and corruption.” As the situation in Venezuela continues to worsen we will see what steps the United States will take in applying pressure to the Venezuelan government. With the chaos brewing in Venezuela, it will affect oil exports to the United States, increasing gasoline prices and further angering the already irritated American citizens.
[i] US Energy Information Administration, https://www.eia.gov/tools/faqs/faq.php?id=727&t=6 .
[ii] Fox Business, http://www.foxbusiness.com/markets/2017/07/31/falling-oil-prices-caused-venezuelan-crisis-not-socialism-marxist-economist.html .
[iii] The Guardian, https://www.theguardian.com/world/2017/jul/26/us-venezuela-sanctions-nicolas-maduro .