The political crisis in Venezuela has further raised the price of crude to a level that highly beneficial to the economy of some countries like Nigeria.
Brent crude futures yesterday rose to $64 a barrel as the Organisation of Petroleum Exporting Countries (OPEC)-led supply cuts and sanctions from the US against the country’s petroleum industry offset forecasts of weaker demand and an economic slowdown.
The budget currently under the consideration of the National Assembly, has $60 oil benchmark. Analyst say the Federal Government will not only have the cash to implemenet the budget which has the largest capital project component in the history of the oil rich nation, the excess crude account will witness a big boost.
The sanctions came into force yesterday and ban US companies from exporting goods or services to the country’s state-run oil company, Petroleum of Venezuela (PDVSA). Spot gold also fell slightly by 0.5 per cent to $1,310.76 per ounce – its lowest level in nearly a week.
Yesterday, 10 European countries joined the US in recognising opposition leader Juan Guaido as Venezuela’s interim president, heightening a global showdown over Nicolas Maduro’s socialist rule.
The coordinated move from Britain, France, Spain, Germany, Portugal, Sweden, Denmark, Austria, the Czech Republic and the Netherlands came after the expiry of an eight-day ultimatum for Mr Maduro to call a new election.
The US is Venezuela’s biggest oil customer, accounting for 39 per cent of the OPEC nation’s deliveries last year, according to ClipperData.
Russia and China, which have poured billions of dollars of investment and loans into Venezuela, are supporting Mr Maduro in its geopolitical feud with the US.
The embattled President has told his US counterpart to stop his “dirty” imperialist conspiracy to overthrow him. Maduro also rejected European calls for fresh elections.
Speaking to Spanish journalist Jordi Evole, he raged: “Stop, stop, Trump! Hold it right there!
“You are making mistakes that will leave your hands covered in blood and you will leave the presidency stained with blood.
“I refuse to call for elections now – there will be elections in 2024. We don’t care what Europe says.”
Maduro was accused of running the oil-rich country of 30 million people like a dictatorship and destroying the economy, but has continued to defy them.
Last month, Mr Guaido declared himself temporary leader in a move that has split opinion across the world and brought rioting Venezuelans onto the streets.
US President Donald Trump immediately recognised him as leader but European Union countries have not been so quick to follow suit.
Mr Maduro replaced former President Hugo Chavez in 2013 following his death but he has seen Venezuela’s economy collapse along with the exodus of three million of the country’s people.