Another Socialist Success: Venezuela Imports Oil from U.S.

"They are importing barrels that cost $80 to $90 and are selling them at $0."


Alessandro Scagliusi/Dreamstime

Venezuela has the world's largest proven reserves of petroleum. In 1998, when Bolivarian socialist Hugo Chavez was elected president, the country was producing about 3.5 million barrels of oil a day. As recently as 2013, when Nicolas Maduro ascended to the presidencey upon Chavez's death, the country was still pumping out about 2.8 million barrels a day. Since 2016, month daily production has dropped to 1.5 million barrels.

Venezuela's heavy crude oil needs to be diluted with lighter petroleum products so that it can be refined into fuels. The Independent reports that as a result of the ongoing collapse of domestic refining, the South American country is now obliged to import about 200,000 barrels a day of diluents from the United States. The Venezuelan government sells gasoline at 1 cent per liter (80 cents in the U.S.). Even with the fanciful assumption that all the petroleum in a barrel could be refined into vehicle fuel, a rough calculation implies a value of $1.60 per barrel. The diluents from the U.S. cost about $80 to $90 per barrel.

"One of the craziest things is that a part of Venezuela's imports is for the domestic market, but given its price, they practically give gasoline away for free," Francisco Monaldi, a fellow in Latin American energy policy at Rice University, tells The Independent. "They are importing barrels that cost $80 to $90 and selling them at $0."

Despite Chavez's dysfunctional economic policies, Venezuela's GDP ascended along with oil prices during the first decade of the 21st century. But since peaking at $334 billion in 2011, the country's GDP has dropped to $215 billion. The economy shrank by 16 percent last year, and the International Monetary Fund projects it will shrink by another 15 percent this year. Inflation, meanwhile, is nearing an annual rate of 9,000 percent.

As The Independent notes:

Oil makes up more than 90 per cent of the nation's exports, but a combination of government corruption, lack of investment and the migration of qualified staff have left the industry in ruins. It's a crisis that has directly hit the country's ability to import resources like food or medicine for the Venezuelan population.

It is a vicious spiral. It is estimated that 10 per cent of the population has emigrated. Almost two thirds of all households have at least one family member living abroad. And among those 3 million migrants are young and competent workers who have escaped from a country that sinks deeper into crisis.

This is what real socialism looks like.

For more background on the sad but entirely predictable collapse of Venezuelan socialism, see Reason's articles here, here, and here.

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  1. But if they only had a few more rich people to tax, this would not be a problem – – – – – – – –

    1. Or the right people in charge.

    2. if only they paid their fair share the world would be all smiles and sunshine!

    3. The government just needs more power.

  2. “Nuh uh, we mean Danish socialism” – the Bern Unit

    1. You need Viking blood for that. Bernie has no Viking in him, thought he would like some.

      1. I don’t think Ivar the Boneless will be much help here.

        1. Wypipo socialism

      2. Yes, if by “Viking blood” you mean “reserves of wealth built up during a period where a hard-working, well-educated, largely homogenous population toiled in a captialist system”, then yeah.

  3. Venezuela’s bad luck worsens.

    1. I think they are just culturally appropriating Cuba’s economic methods.

  4. Venezuela is a real-life version of Atlas Shrugged if it had been written by Phillip K. Dick.

    1. It’s like at some point Chavez took all the smart people in the country into the jungle and shot them to death.

      1. Not exactly. He mostly just chased them out of the country. I have several Venezuelan expat friends and wondered how come a country full of intelligent, educated people who have their act together has gone to shit. The answer is the country’s no longer full of them. All the bright ones very wisely left.

        1. This. Especially the scientists, engineers, and technicians who ran the Venezuelan petroleum industry, in both private and national companies.

  5. “They are importing barrels that cost $80 to $90 and selling them at $0.”

    They’ll make it up in volume.

    1. You beat me to it.

      1. Me too.

    2. Or cocaine sales.

    3. Goddamnit, every time I hit the “like” button this reply window comes up.

      Anyway, +1, snarktastic

    1. You win this time Capitalism

      1. Us Left Libertarians will get you someday.

      2. “And we’d have gotten away with it if it weren’t for those pesky “laws of economics”!!”

  6. These commie countries always make a fetish of giving away gasoline – it’s weird.

    1. Bread and circuses and gas.

    2. Gas and toilet paper. If your country runs out of either it won’t be too long before you end up hanging from a lampost.

      1. Molotov cocktails

  7. “Since peaking at $334 billion in 2011, the country’s GDP has dropped to $215 billion. The economy shrank by 16 percent last year, and the International Monetary Fund projects it will shrink by another 15 percent this year. Inflation, meanwhile, is nearing an annual rate of 9,000 percent.

    That isn’t really an indictment against socialism because . . . um . . . they skipped a step in Marx’s plan. Besides, they don’t have the right people in charge. If they had the right people in charge, . . .

    We could do something insanely great like this in America, but first we’d have to stop caring about ourselves and teach Midwestern swing voters to hate themselves for being stupid. Then we could implement Venezuela’s program–but with Bernie Sanders in charge instead of Maduro. Everything would be all rainbows and unicorns.

    1. Have you ever LOOKED at Marx? That guy fucked. I trust him.

    2. Well California is trying its best to be the next Venuzeula since the next governor of California will not allow oil drilling off the coast even though the oil percolates up through the ground. soon we will have to import everything including people to go on welfare

    3. If El Comandante Eterno e Intergalactica Chavez were still alive. I’m sure the CIA gave him cancer because they WANTED Bolivarian Socialism to fail.

  8. Sean Penn couldn’t be reached for comment.

    1. They don’t deliver pizza to high school students, while in class, in Managua.

  9. Remember, Pinochet was a bad guy for shooting the communists. He saved Chile from the fate of Venezuela and Cuba. And shooting these people is the only way to stop them once they get into power.

    1. Dick Wolf had a problem with that. See the Vaya Con Dios episode which first aired on May 24, 2000.

      I have a problem with Dick Wolf – yet, owing to my wife’s insistence, I know L&O cold.

      1. Your wife has fine taste. L&O, particularly the original series, is great.

        I love the early episodes with Michael Moriarty as the Assistant DA. He was vicious. Plus, the first season where you’re seeing 1989 NYC and seeing how incredibly grimey it is is cool.

        Love the whole series though.

        1. Yes, I agree. I shouldn’t lay it off on my wife because if I didn’t like the show, I wouldn’t hesitate to exercise my remote control rights.

          Moriarty was superb. He was vicious, but the writers / producers didn’t allow him to be a one-dimensional cartoon character. He was capable of going easy on a particular perp.

          The first few years featured the original, longer opening L&O theme, with more of the acoustic guitar.

          Yeah, BUCS, notwithstanding my dislike of Dick Wolf’s progressivism, I must say I love the show as well.

    2. Pinochet did not need to establish a dictatorship and execute thousands to remove the threat of Allende. You can argue about the coup itself, as Allende was blatantly ignoring the legislative and judicial branches of government but had enough support from his party and their allies in the legislature to avoid removal from office. But I don’t see any justifiable case for a dictatorship that lasted nearly 20 years. Or for all the executions.

      Allende’s left-wing alliance had been crushed in the parliamentary elections earlier that year by a coalition of the primary centrist and right-wing parties. Contrary to left-wing narratives, Allende did not have broad support among the people, and there’s no reason they couldn’t have called a new presidential election to replace him.

      1. Except that he would never have accepted the results.

      2. Chavistas have been in power longer than Pinochet was. Pinochet gave up power when he was voted out. And Chileans continued to elect him to their parliament.

    3. “And shooting these people is the only way to stop them once they get into power.”

      Helicopter rides

    4. Helicopter rides are also popular. For real, I think Pinochet did it to them before they could do it to him and everyone else.

  10. If only the U.S. was Socialist too then they could sell their diluents to Venezuela for $1/barrel and then everything would be fine.
    Obviously Venezuela is failing because of the Capitalist pigs!

    1. You can clearly see how profit ruins everything.


    Prime Minister Benjamin Netanyahu revealed a cache of documents he says proves Iran lied to the world about its nuclear program for years, even after the 2015 nuclear deal with the world. “Iran did not come clean about its nuclear program,” Netanyahu said in a prime time address in English. Iran, for its part, blased the speech as “propaganda.”

    Presenting 55,000 pages of documents and 183 CDs, Netanyahu said Iran hid an “atomic archive” of documents on its nuclear program.

    This is an original Iranian presentation from these files,” Netanyahu said, stressing that “the mission statement is to design, produce and test five warheads with 10 kiloton of TNT yield for integration on missiles.”

    1. Netanyahu concluded by saying “Iran lied about never having a secret nuclear program. Secondly, even after the deal, it continued to expand its nuclear program for future use. Thirdly, Iran lied by not coming clean to the IAEA,” he said, adding that, “the nuclear deal is based on lies based on Iranian deception.”

      This should surprise no one.

      1. Since their word means nothing and they sponsor the worst kind of terrorism, I always just assumed that any deal struck with them would be worthless. It shocks me that anyone else would even consider them to be trustworthy at all.

    2. I saw someone say “Benjamin (((Netanyahu)))” on a website, and I fear that that might be a little too on the nose.

        1. I think putting the scary jew indicator (which is what the ((( ))) signs mean) around the president of Israel is going into the obvious antisemitism a little TOO hard.

          1. Wait, that’s what those mean? I thought they were just one of those stupid internet emphasis things.

            So “I love fucking (((chinchillas)))” isn’t a way of signaling you wanted to boldface chinchillas then?

            1. Means your chincillas are jews.

              1. Or at least circumcised.

          2. Wait, a major Israeli politician is Jewish?

            *mind blown*

          3. They stole a half of ton of documents. Now they are bragging about it just to screw with the Iranians. That is bad ass.


            1. Well, then. I guess Obama just, like, wasn’t told about this when making the deal? Or maybe Israeli intelligence is just that much better?


            2. To save money when they stole the documents, did they reuse the pallet than the cash was on?

          4. Since it only around his last name, does that mean he is only half Jewish?

          5. Except that the president of Israel is Reuven Rivlin, not Benny Netanyahu.

            1. You mean Reuven (((Rivlin)))?

    3. And Netanyahu has no reason to lie, has an unassailable record of honesty, and the Iranians still are working on nuclear weapons even though they have inspectors crawling all over their ass?

      I mean, that could be possible. But i hope folks aren’t just taking the israeli gov at their word before going to war with Iran. I mean, no one has ever provided fake “evidence” to lie the US into war before, right?

      1. He could lie however the Intel is being shared with other agencies. I do not think Netanyahu would risk the almost mythical reputation of the Mossad by presenting false data. That is just not how they operate historically. If the French or Germans found out it was fake it would destroy the cooperation they have built up over decades.

        What he said is not so astonishing. Of course they were working on a nuke. What he is doing is taking the Intel and creating some political hay out of it as talks on the deal are starting up. It also sends a strong signal to Iran.

        1. Just to add I do not think war is the intention. Even the missiles Israel uses to take out Iranian installations in Syria are not intended to start a war but rather to prevent one.

          1. Were working on a nuke – agreed. Not working on one now, and we do not want to force Iran into the unwinnable position (as the US is wont to do) of having to pull out of the deal, and the nonproliferation agreement. We want inspectors there to be sure they’re not building weapons.

            So I hope you’re right that war is not the desire. Regardless, thank you for the response.

            1. Sure. Those inspectors are in actual functional positions to do anything worthwhile. I’m sure that’s the case.

              On a related note, does anyone know the Persian for “gentlemen, the missles are flying, hallelujah!”

      2. If by “inspectors crawling all over their ass” you mean “inspectors being wined, dined and going where they are allowed to go”, then yes.

    1. I was listening to that today. Fucking chick is batshit crazy. Fun listen though.

      1. her whole schtick about imperialism and leftism doesn’t have any real power wore kinda thin. I guess if you’re a Maoist noone can be to the left of you and from that perspective I guess leftist really don’t hold any power.

      2. She’s kind of half right about everything.

        Statement: The “corporate media” is lying about Venezuela
        Condition: True

        Statement: The media blames Venezuela’s problems on socialism when it’s really right-wing Kulaks and wreckers.
        Condition: Worse than false.

        1. Agreed also her whole Palestinians have never done anything wrong ever and Israeli’s indiscriminately kill children for fun was certainly a perspective i guess people have.

          1. Noam Chomsky built a career out of it. As did Yassir Arafat.

        2. Also interesting Trump take on the deep state. Sure Trump is embroiled in a criminal investigation that managed to clear out his cabinet of people who are somewhat anti-establishment, but this is just proof Trump is the deep states favorite guy.

    2. It’s always the Kulaks.

      Sometimes they’re disguised as Jews. Sometimes as White Males.

      But it’s always Kulaks.

  12. Fuck yeah! Ron Bailey scores! Serious international journalism lives today, yes sir.

    Imma read the article now. Sorry, I saw the subject and got all excited.

    1. Your reaction was as justified as “Oh, an immigration story. Must be that Dalmatian chick sperging again.” always is.

    1. Very interesting but sad to read. His diction suggests he’s a native Spanish speaker.

  13. “This is what real socialism looks like.”

    No true socialism.

  14. Haha this is pretty funny. Thanks for this information Mr. Bailey. You are my favorite on this website 🙂

  15. Imagine you take the nations wealth for current consumption year after year and long term production declines. The old saying about “eating the seed corn” That’s all you need to know about socialism.

  16. Comrades Sanders must be so proud!

  17. There seems to be this red meat attitude about socialism. Its just the most awful thing that can happen to anyone whatsoever. See for yourself, is it really as bad as you fear it is.…..the-world/

    Below, you will see some of the most socialistic nations in the world today:

    New Zealand

    1. Quite the honor roll, there. I see several countries squandering wealth gained from decades, if not centuries, of capitalistic economies, and one moving away from an even more leftist system.

      How many of them will still be socialist (other than in name) when they run out of wealth acquired under other economic systems? Some of them seem to be hitting the wall right NOW, though largely ones that have imported unskilled, hostile, non-assimilating permanent-dependent populations from abroad. Smart move, that.

      1. Maybe you don’t like egalitarianism. I do.

        Finland has one of the world’s best education systems, with no tuition fees and also giving free meals to their students. The literacy rate in Finland is 100 percent. Finland has one of the highest standards of living in the world. Like Denmark and other European countries, equality is considered one of the most important values in society. Whereas in the Netherlands, government control over the economy remains at a minimum, but a socialist welfare system remains. The lifestyle in the Netherlands is very egalitarian and organized, where even bosses do not discipline or treat their subordinates rudely.

    2. I think you confuse socialism with massive welfare states. Neither is good, but socialism is downright evil.

  18. Nationalizing the industry is always a bad idea. Goodbye talent, hello inflation.

  19. What? They can’t just pass out free Teslas?

    The electrical grid in Venezuela is in worse shape than its oil industry. But they can always push their electric cars if they want to go somewhere, right?

  20. Damn. I want me some 1 cent per gallon gas! I’ve always drawn the line at not buying vehicles that get less than about 20 MPG highway, and are a few gallons into the double digits in the city… But a nice ol’ vintage big block Suburban would totally be in my driveway if I only had to pay 1 cent a gallon! One of my friends dads had a 454 Suburban back in the day, and said he got about 7-8 MPG around town. Badass truck though!

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