According to ANZ analysts, Venezuela’s political stability continues to deteriorate, with rolling blackouts crippling its oil industry and the US sanctions, which followed the disputed election of the Maduro government, led to a sharp drop in exports of crude oil.
Key Quotes
“We believe the risks are increasingly skewing towards a bigger disruption than the market expects.”
“The high-case scenario aligns with the market’s expectation of a clean transition to a new government followed by sanction relief. That could see production recover later this year and into 2020.”
“Our base-case scenario assumes that Maduro holds his claim to the Presidency, and the sanctions stay in place. This would see a continued fall in production and exports over the next 18 months.”
“The low-case scenario is closer to our base case but with additional US sanctions, asset freezes and a crumbling Venezuelan electricity network. That could see crude output tumble further.”
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