Venezuela On The Brink Of Collapse Buys Oil…To Help Cuba

(Photo credit should read JUAN BARRETO/AFP/Getty Images)

Venezuela on the brink of collapse buys foreign oil to ship it to its old ally, Cuba.

That’s according to Reuters report, which reveals that Venezuela’s state-owned oil company PDVSA has purchased close to $440 million worth of foreign crude oil and shipped it directly to Cuba on friendly credit terms – and often at a loss.

And that’s certainly a bizarre policy for obvious reasons. One of them is that Venezuela is major oil producer, and one would expect to ship oil to Cuba from its own reserves rather than buying them in the market. Another reason is that Venezuela is at the brink of collapse, needing all the help it can get from allies rather than subsidizing them.

But nothing no policy is bizarre in a country where there’s a long list of failed government policies, which date back several decades, even before Bolivarian socialism.

Like the wave of nationalizations in the late 1970s, which placed the country’s resources in the hands of government bureaucrats rather than professional managers.

And the price controls and heavy subsidies under President Caldera and his allies, which made crude oil cheaper than water, while widening the government deficit and adding to soaring government debt in the meantime.

And much more.

Like the currency controls that favored foreign manufacturers over domestic manufacturers.

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(Photo credit should read JUAN BARRETO/AFP/Getty Images)

Venezuela on the brink of collapse buys foreign oil to ship it to its old ally, Cuba.

That’s according to Reuters report, which reveals that Venezuela’s state-owned oil company PDVSA has purchased close to $440 million worth of foreign crude oil and shipped it directly to Cuba on friendly credit terms – and often at a loss.

And that’s certainly a bizarre policy for obvious reasons. One of them is that Venezuela is major oil producer, and one would expect to ship oil to Cuba from its own reserves rather than buying them in the market. Another reason is that Venezuela is at the brink of collapse, needing all the help it can get from allies rather than subsidizing them.

But nothing no policy is bizarre in a country where there’s a long list of failed government policies, which date back several decades, even before Bolivarian socialism.

Like the wave of nationalizations in the late 1970s, which placed the country’s resources in the hands of government bureaucrats rather than professional managers.

And the price controls and heavy subsidies under President Caldera and his allies, which made crude oil cheaper than water, while widening the government deficit and adding to soaring government debt in the meantime.

And much more.

Like the currency controls that favored foreign manufacturers over domestic manufacturers.

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