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The government of Nicolás Maduro reacted angrily on Wednesday after American troops descended from helicopters onto a tanker loaded with Venezuelan oil.
The seizure of the ship, which the Trump administration said was violating U.S. sanctions, was, according to Caracas, “a blatant theft and an act of international piracy.”
The Venezuelan government's response in understandable. Oil plays an outsized role in the country's economy and has long helped prop up Maduro’s rule. Francisco J. Monaldi, an expert on Latin American energy policy, explains that oil constitutes upward of 80% of Venezuela’s exports and around half of all government revenue. Most of that oil heads to China by way of a sanctions-busting shadow fleet that operates around the world.
The problem for Maduro now is that the threat of further U.S. seizures and the impact of fresh sanctions announced by Washington will likely push down the price it can demand for its oil. Simply put, buyers will want a larger discount from Venezuela to compensate for the additional risk. They will also be far less likely to pay upfront for oil that might be seized and taken to the U.S.
“All this will further choke off the already limited revenue that Maduro is relying on to keep Venezuela’s government functioning,” Monaldi concludes.
Elsewhere this week, we have been eyeing with concern the escalating tensions between China and Japan and pondering whether Dick Van Dyke’s positive outlook on life is keeping him alive.
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