US Officials Warn of Looming Crisis in Venezuela

Venezuela should be prosperous in terms of its location and the largest reserves of crude oil in the world. But low oil prices caught such countries by surprise. Foreign oil companies are reducing activity due to low prices and payment struggles. “Venezuelan President Nicolás Maduro, already struggling to keep his country’s lights on and its stores stocked with basic food, faces a series of challenges to forestall a recall election and thwart creditors awaiting a seemingly inevitable debt default,” reports Tim Johnson for McClatchy Newspapers. To avoid default, the government is limiting imports which is compounding shortages. If Venezuela defaults, creditors could go after three CITGO refineries based in the United States. Maduro has often blamed the United States for the country’s economic struggles, but US intelligence officers are privately expressing alarm about the potential for economic collapse and unrest. Other countries can do little to assist until Venezuela enacts reforms, including reversal of price and currency controls and assuring investors of greater certainty. – YaleGlobal