Tension is growing between Venezuela and Argentina over an energy cut
Tensions between Argentina and Venezuela are rising after a diplomatic clash between Buenos Aires and Caracas.
Argentina accused Venezuela of cutting power to its embassy in Caracas, after its diplomats in Buenos Aires invited Venezuelan opposition leaders, due to concerns about “the deterioration of the institutional situation and the acts of harassment and persecution directed against political figures in Venezuela”.
In a statement released Monday by the Office of Argentine President Javier Milei, Argentina complained that the embassy's power was cut off in a "deliberate action that endangers the safety of Argentine diplomatic personnel and Venezuelan citizens under protection."
Tensions between Buenos Aires and Caracas were already at a high level after Venezuela's socialist President Nicolás Maduro criticized Milei's far-right election victory in November last year, claiming that the "neo-Nazi far-right" had gained power.
The situation reached a peak a couple of weeks ago, after Argentina announced diplomatic actions against Venezuela following Maduro's ban on access to Venezuelan airspace by Argentine-licensed aircraft.
Among other things, even from an energy point of view, the two countries are going in opposite directions: while Venezuela's crude oil production fell sharply from 3.2 million b/d in 2000 to 735,000 b/d in September 2023 , mainly due to sanctions and poor maintenance, Argentina's crude production has increased and Milei has vowed to shake up the system.
At a time when a wave of nationalizations is sweeping through Latin America, Milei has proposed privatizing 41 state-owned companies, including national oil company YPF, nuclear energy company Nucleoeléctrica Argentina and energy infrastructure operator Energía Argentina. It is also seeking to free up crude exports and leave local fuel prices at the mercy of market forces. The exact opposite of the situation in Venezuela.
“Energy prices will adjust to international values. The most radical change is the elimination of the requirement (for YPF) to meet local market needs – it is a historic break with a century of Argentine tradition,” wrote Juan Jose Carbajales, an energy consultant and former undersecretary of petroleum and gas. gas, in a relationship.
Fitch Solutions reported that Argentina's 2023 crude oil production grew 8.7% yoy to ~640,000 b/d, supported by pipeline expansion, and is approaching that of Venezuela. With the difference that Argentina is not even an OPEC member so it does what it wants.
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The article Tension grows between Venezuela and Argentina over an energy cut comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/cresce-la-tensione-fra-venezuela-e-argentina-per-un-taglio-energetico/ on Wed, 27 Mar 2024 21:05:34 +0000.