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OPEC-member Venezuela facing more regional pressures

Washington calls for the suspension of Venezuela from the Organization of American States, as well as for additional sanctions.

By Daniel J. Graeber
OPEC-member Venezuela facing more regional pressures
Secretary of State Mike Pompeo calls for suspension of OPEC-member Venezuela from the Organization of American States. File Photo by Olivier Douliery/UPI | License Photo

June 5 (UPI) -- Venezuela may be facing further economic obstacles as the U.S. secretary of state calls for its suspension from the Organization of American States.

Venezuelan President Nicolas Maduro faced widespread criticism for holding elections in his country early. By putting his opponents on their heels, Maduro last month secured another six-year term in an election his global critics called a sham.

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Already under increased pressure from economic sanctions, U.S. Secretary of State Mike Pompeo issued a call Monday for Venezuela's suspension from the OAS because of "an unconstitutional interruption in democratic order."

"In addition to suspension, I call on fellow member-states to apply additional pressure on the Maduro regime, including sanctions and further diplomatic isolation, until such time as it undertakes the actions necessary to return genuine democracy and provide people desperately needed access to international humanitarian aid," he said in his remarks from Washington D.C.

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Maduro's regime won minor praise after releasing political prisoners, including American Joshua Holt and his Venezuelan wife, Thamy Caleno, who were arrested in 2016 in Venezuela on weapons charges. Pompeo said that effort, however, was not enough to ensure democratic norms prevail in the country.

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Maduro, in a message posted through his Twitter account, said he denounced the U.S. government for trying to blackmail Latin American countries.

"Venezuela will emerge victorious from this battle for the dignity of the people," he said.

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The OAS includes all 35 independent states of the Americas.

Venezuela is a member of the Organization of Petroleum Exporting Countries. Sanctions pressures on the country have clogged financial channels and made it difficult for the country to produce oil.

Secondary sources reporting to OPEC economists estimated Venezuelan oil production at 1.4 million barrels per day in April, the last full month for which data are available. That's down from the 2.1 million barrels per day average in 2016, the year in which OPEC's production curtailment agreement began.

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Ole Hanson, the head of commodity strategy at Danish investment firm Saxo Bank, told UPI that any additional sanctions pressure was likely moot given the chronic declines in Venezuelan production.

"Maduro seems to be perfectly capable of destroying his own oil industry without the help of the United States," he said.

With steady declines in Venezuelan oil production, and the potential for the loss of Iranian oil barrels due to unilateral U.S. pressure, OPEC members have said they may consider putting more oil on the market in the second half of the year.

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Apart from production declines, sanctions are crippling Venezuela's economy. The International Monetary Fund expects gross domestic product to shrink 15 percent this year. Consumer prices, meanwhile, could climb by more than 13,000 percent on the year.

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