Falling Oil Prices Turn Up The Heat On Venezuela's Maduro

December 4, 2014 10:07 PM

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On Nov. 27, as the OPEC oil cartel gathered in Vienna to discuss falling oil prices, the front page of Venezuela’s anti-government Tal Cual newspaper ran a cartoon showing President Nicolás Maduro and his former oil and economic tzar Rafael Ramírez praying before a barrel of oil. With the oil and gas sector accounting for a quarter of the Venezuelan economy and oil sales the source for around 95% of export earnings, the country has been hammered by the recent drop in prices. OPEC’s decision last week to hold off on production cuts to arrest the decline promises to sharpen the pain for oil-dependent nations like Venezuela. It is also a political challenge for Maduro who has grown increasingly unpopular since being elected after the death of his political mentor Hugo Chávez last year.

Although he tried to put a brave face on the OPEC decision—in a nationally televised address the same day, Maduro claimed there was nothing for Venezuelans to worry about—the fact is that the Venezuelan economy is in free-fall. Figures released by the government in September showed annual inflation ...

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