Tension mounts between US and oil-rich Venezuela

LAHORE: The United States of America has now fallen apart with the oil and gold rich South American nation of Venezuela, whose proven oil reserves of over 297 billion barrels are recognised as the largest in the world. In recent days, while the embattled socialist Venezuelan President, Nicolas Maduro, has gone on to sever diplomatic ties with Washington DC, the US Secretary of State, Mike Pompeo, has called upon all countries in the hemisphere to reject Maduro and “align themselves with democracy.”

Venezuelan President, Nicolas Maduro, has struck back against his opponents, winning strong support from the country’s armed forces and the solid backing of Russia, which warned the United States not to intervene.

According to the “New York Times, "President Maduro had faced the most direct challenge to his hold on power on Wednesday last, when an opposition leader stood in the streets of the capital and declared himself the legitimate president, cheered on by thousands of supporters and a growing number of governments, including the Trump administration."

With a population of around 32 million and a GDP of over $389.4 billion in2017, the inflation-ridden Venezuela’s late President, Hugo Chavez, had once announced in 2011 that his nation's oil reserves had surpassed those in possession of the previous long-term world leader, Saudi Arabia.

However, the wealth and luck that should have been brought by Venezuela’s huge oil reserves, has been affected by political unrest in recent years. In 2009, (OPEC) had revealed that Saudi Arabia's reserves stood at 265 billion barrels in 2009.

It goes without saying that as far as the capacity to exploit oil is concerned, Saudi Arabia continues to be the world's undisputed main producer with the ability to pump more than 8 million barrels per day.

On the other hand, Venezuela was the world's No. 5 oil exporter and a key supplier to the United States a few years ago.

In July 2011, the Indian “NDTV” and the “Reuters” news agency had both reported, along with many premier global media houses, thatVenezuela was the country gifted with the most proven crude oil reserves on the planet.

Quoting the Annual Statistical Bulletin of the Organization of the Oil Exporting Countries (OPEC), the “NDTV” had stated that Venezuela had 296.5 billion barrels of oil under its control.

The “NDTV” had reported: “The South American country's known reserves grew between 2009 and 2010 by 40 percent, compared with the stagnation of Saudi Arabia's reserves, which OPEC figures to be 264.52 billion barrels. Ecuador, the other Latin American member of OPEC, in 2010 had reserves of 7.2 billion barrels, 10 percent more than it possessed the previous year.”

In its January 3, 2019 report, the “Bloomberg” had also acknowledged that in 2018, Venezuela exported 1.245 million barrels of oil per day and that it was home to world’s largest crude oil reserves.

Research conducted by the “Jang Group and Geo Television Network” shows that in December 2017, Venezuelan President Maduro had announced the “Petro Cryptocurrency,” a scheme meant to help ease the country’s debt.

He was heard saying that the new virtual currency would either be backed by the country’s untapped oil wealth or mineral wealth, including gold, a metallic ore called Coltan and diamonds.

President Maduro had claimed: “Some 150 companies from 35 nations are very interested in investing in Venezuela’s mining bonanza.” Research further shows that Venezuelan Government authorities have at times optimistically boasted that their mining regions holds 7,000 tons of gold, which is roughly worth $200 billion, besides possessing $100 billion in Coltan, a metallic ore ubiquitous in electronic devices; and over three billion carats in diamonds!

Colonized by Spain in 1522, Venezuela became one of the first Spanish-American territories to declare independence in 1811, though the country had gained full liberty as a country in 1830.

Adverse state of Venezuela’s economy:

On October 9, 2018, renowned American media house “Bloomberg” had reported: “Venezuela’s annual inflation rate will surge to 1.37 million percent by the end of the year as the government fails to cover a widening budget shortfall by printing money, according to a report from the International Monetary Fund (IMF).”

The media outlet had added: “That estimate from the latest IMF World Economic Outlook is up from the forecast of 1 million percent the IMF made in July 2018 and more than a hundred times faster than its January estimate of 13,000 percent. Looking ahead, consumer prices will rise 10 million percent in 2019, according the report.”