“The national oil company owes $3.5 billion due in October-November. They are unlikely to make those payments,” Croft added in the CNBC interview. “Venezuela has less than $10 billion now in reserves, and then have $5 billion in debt payments coming due this year. … We really do think a disorderly default is on the cards for Venezuela.”
Related: OPEC a Threat to Oil’s Rally
Venezuela is Latin America’s largest oil producer, but that production is continually sliding because of the government’s heavy hand in the oil business and its refusal over the years to make the necessary infrastructure investments to make oil production there more economical.
“Crude Oil Production in Venezuela decreased to 2156 BBL/D/1K in June from 2189 BBL/D/1K in May of 2017. Crude Oil Production in Venezuela averaged 2423.92 BBL/D/1K from 1973 until 2017, reaching an all time high of 3453 BBL/D/1K in December of 1997 and a record low of 594 BBL/D/1K in January of 2003,” according to Trading Economics.
For more information on the crude oil market, visit our oil category.