Who Benefits from OFAC’s Chevron License?

In recent days, the US government authorized Chevron Corporation to resell Venezuelan oil in US markets but barred it from making tax and royalty payments to the Venezuelan state. We argue that the restriction on these payments is symbolic because fiscal liabilities are incurred not by Chevron but by the joint ventures in which Chevron is a minority partner and whose decisions it is unable to control. Furthermore, we show that as long as regaining access to US markets enables Chevron joint ventures to increase production levels, the Maduro government will receive additional hard currency revenue flows which it can use at will. This result holds regardless of whether incremental revenues are used to reduce PDVSA’s debt arrears with Chevron.

The economic determinants of Venezuela’s hunger crisis

This paper argues that Venezuela’s hunger crisis was caused by the collapse of the country’s import capacity. I show evidence supporting the hypothesis that the key driver of the decrease in caloric intake was the decline of more than nine-tenths in oil revenues, which sparked an economic contraction and forced the economy to undertake massiveContinue reading “The economic determinants of Venezuela’s hunger crisis”

Es hora de aliviar las sanciones. Cuidado cómo lo haces.

Un comentario sobre Informe del Grupo de Trabajo de Venezuela del Atlantic Council Francisco Rodríguez. Director, Petróleo por Venezuela El Atlantic Council acaba de publicar un informe, “ Exploring Oil-Finded Humanitarian Frameworks for Venezuela ”, que evalúa las propuestas de programas humanitarios financiados con petróleo para Venezuela que compiten entre sí, y establece una serieContinue reading “Es hora de aliviar las sanciones. Cuidado cómo lo haces.”

Sanctions and Oil Production: Evidence from Venezuela’s Orinoco Basin

We use the differential access to credit of oil firms in Venezuela’s Orinoco Basin to identify the economic effects of financial and oil sanctions on firm output.  Using a panel of monthly firm-level oil production from 2008-2020, we provide estimates showing that financial and oil sanctions led to large losses in oil production among firms which had access to international credit prior to sanctions.  The estimated effects explain around half of the output drop experienced in those firms since the adoption of sanctions, and argue that in the absence of sanctions, production in the Basin would be between three to five times its current level.