Today’s OPEC meeting in Vienna has all the makings of a turning point in the history of oil, and Venezuela.
In agreeing not to cut oil production quotas in the face of a steep price decline – driving oil prices into the mesosphere – the organization has decided that business as usual … is over. The long-term challenge of shale oil will be confronted head on through a price war, and members will defend their market share. Saudi Arabia, in particular, seemed to be saying to countries that failed to save in good times: “tough.”
The meeting was lapidary for the Revolution’s pretension to continue in its failed model. If $100-per-barrel oil is gone for good, we will need to adapt. We cannot continue living on exploding budget deficits, massive state bureaucracy, enormous subsidies, and restricted imports to sort-of make ends meet. Good luck with that.
It’s over, chavistas, it really is. And you know what should also be over? Rafael Ramírez’s career. This is all his fault.
After his demotion a few weeks ago, Mr. Ramírez was kept in the Cabinet for a single reason: the connections he had cultivated with oil ministers through the years. In the last couple of weeks, Ramírez cashed in those chips, taking the unusual move of traveling to countries near and wide, OPEC and non, to forge a consensus on reducing output in order to defend plummetting prices.
Not only did Ramírez fail to get the reduction he wanted – he wasn’t even able to get a symbolic one at all. The markets were saying 2 million barrels had to be withdrawn, but by agreeing to no cuts at all, the Saudis were adding insult to injury.
Not even one hundred thousand barrels less? Hell no, the Saudis could not be bothered to budge, particularly after knowing that price drops are hurting their arch-enemy, Iran.
Ouch. It’s no wonder that Ramírez left like a raging ball of fire, while Saudi oil minister al-Naimi smilingly called it “a great decision.”
Ramírez didn’t simply fail, he was embarassed, and for that, he has to go. He’s been in the Cabinet long enough, and we face a new reality in oil markets, one that he is ill-equipped for. All the goodwill he has accumulated through the years has evaporated, and any remainders are of no use to us now. He has been reduced to a muttering fool, blabbering nonsense about how shale gas is bad for the environment.
Rafael Ramírez, defender of nature. That’s what iot’s come to. Qué pena con ese señor …
We need someone at the helm who can bring in needed investment and change the face of the oil industry for the better. We need someone who understands the long-term challenges we face with shale oil, and can deal with them effectively. We need someone who can convince the dimwits in charge that business as usual is no longer.
That person is not Rafael Ramírez. Enough of this man and his failed policies.Caracas Chronicles is 100% reader-supported. Support independent Venezuelan journalism by making a donation.