by Michael Bastach When Juan Guaido launched his coup attempt, oil markets didn’t do what they typically do in the face of supply threats. Instead, markets largely shrugged off Venezuelan unrest instead of sending prices soaring. That’s because of two factors: mismanagement by Venezuela’s socialist government and the U.S. energy boom. At the turn of the century, Venezuela’s daily oil production was around 3 million barrels per day, but output dramatically declined during the reign of former President Hugo Chavez, a former military officer who took control in 1999. Venezuela sits atop the world’s largest proven oil reserves. “Venezuela’s oil production has collapsed in recent years,” Juan Carlos Hidalgo, a policy analyst at the libertarian Cato Institute who specializes in Latin America, told The Daily Caller News Foundation. “Years of mismanagement, corruption and underinvestment are taking a toll,” Hidalgo said. “Oil has long been a terribly distorting factor in Venezuela’s political system.” Chavez, who essentially ruled as a socialist dictator, took several actions early on that crippled Venezuela’s long-term oil prospects, according to the Council on Foreign Relations, including firing thousands of experiences oil workers and subsidizing oil shipments to Cuba and other countries. Venezuela was also burdened by high inflation, corruption and…
Read the full story