S&P Global — 7 August 2024
Daily Update: August 7, 2024
Contested Venezuelan Election Puts US Sanctions in Focus
By Nathan Hunt
Start every business day with our analyses of the most pressing developments affecting markets today, alongside a curated selection of our latest and most important insights on the global economy
Optimists viewed the July 28 presidential election in Venezuela as a turning point. President Nicolás Maduro agreed to open elections against opposition leader Edmundo González, in part to win concessions on sanctions from the US. But after the voting ended, both Maduro and González claimed that they had won the presidential election. Maduro says he received 51.2% of the vote, but he has not provided voting records to prove that outcome. González says exit polls show that he won with 70% of the vote. In the early hours of July 29, protests against Maduro's proclamation began in Caracas and quickly spread throughout the country.
Almost immediately after the protests began, gasoline shortages began in Caracas and other major Venezuelan cities. Before the shortages began, gasoline supply to the Venezuelan domestic market stood at approximately 90,000 b/d, according to unofficial data. S&P Global Commodity Insights reported that some gas stations in Caracas said July 30 that they had no fuel to sell. Lines of drivers quickly formed for those stations still selling fuel. Some service stations that dispense gasoline at subsidized prices remained open, but only for "authorized people," one of the workers told S&P Global Commodity Insights.
The shortages are unexpected since oil production in Venezuela rose to 993,000 b/d in July, an increase of 85,000 b/d over June, according to the estimated data included in a production report from PDVSA, Venezuela’s state-owned oil and natural gas company, reviewed by S&P Global Commodity Insights. Venezuela depends on revenues from its proven oil reserves of 303 billion barrels and 200 Tcf of natural gas.
The Biden administration is calling upon the Maduro government to provide detailed precinct-level polling to verify the outcome of the disputed election. In October, the US partially eased sanctions on Venezuela's oil and gold sectors in response to an electoral agreement signed between the Maduro regime and the Venezuelan opposition. A spokesperson for the Biden administration said they had no plans to cancel the company-specific licenses given to Chevron and other oil companies following the easing of sanctions, despite the apparent irregularities in the election. Instead, the US intends to focus on a multilateral diplomatic push to pressure Maduro to audit the election results and encourage restraint in confronting the protestors.
Prominent Republicans have been critical of the Biden administration's engagement with the Maduro government. "I believe your administration helped strengthen his power when you foolishly provided him the exact thing he needed, sanctions relief in exchange for a promise of a fair election — something we all knew he would never deliver," Sen. Rick Scott (R-Fla.) said in a July 29 letter to the president. "It is time to acknowledge that your deal with a dictator was a disaster and immediately reimpose sanctions on Maduro and his thugs.”
Today is Wednesday, August 7, 2024, and here is today’s essential intelligence.
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—Listen and subscribe to the podcast from S&P Global Sustainable1
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—Read the article from S&P Global Market Intelligence
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—Read the article from S&P Global Market Intelligence
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—Read the article from S&P Global Market Intelligence
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—Read the article from S&P Global Commodity Insights
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—Read the article from S&P Global Market Intelligence
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