If you think about Venezuela, you may think about a country which should be a wealthy country similar to many Middle Eastern countries, however the country was mismanaged and has suffered greatly over the years. The country had a President who was very popular and ensured everyone in the country received an income but it was only sustainable on high oil prices. The country spent money, people in government spent money and soon the country was importing most of their goods and services. Then oil prices went down and the country was in debt, it tried to give oil for its debts. In the meantime, the US government backed the opposition and put sanctions on its oil industry. Now the US government main enemy is Russia, Venezuela is important again.
Europe needs and uses Russian oil, to diversify away from Russia, the US is looking to Venezuela to supply Europe.
In an article by Marianna Parraga and Matt Spetalnick of Reuters, the US State Department which had sanctions on Venezuelan oil and gas, gave approval for Italian oil company Eni SpA and Spanish company Repsol SA to ship oil to Europe or resuming oil for debt swaps.
Venezuela’s biggest customer is China which also receives oil and gas from Russia.
In Venezuela, the state oil company is called PDVSA and they have unpaid debts and late dividends to oil companies around the world. Other oil companies lobbying to be included are Chevron, India’s Oil and Natural Gas Corp and France’s Maurel & Prom SA. Former President Trump halted swaping oil for debt in a campaign to influence the Venezuelan election.
Linking to dividend paying stocks, governments have their own agenda and sometimes that is good for corporations and sometimes it is not. Commodities are located in countries around the world not worrying about the politics of the people of the land. Government agendas change with new governments and what was bad is good and what was good is bad. Ideally a company has holdings in reasonably stable countries where governments can come and go and companies have a long healthy profitable relationship with its people.
There are more questions than answers, till the next time – to raising questions.