Oil prices are climbing higher this week as the United States escalates its stance against Venezuela with sanctions against its state-owned oil corporation. This gives the Nigerian government more optimism that it will meet up with the 2019 budget, which is benchmarked at $60p/bl.
This will also make more money available for the Nigerian government, which is spending about N242 Billion on the 2019 elections
According to CNBC, International Brent crude oil futures were at $60.05 per barrel, up 12 cents, or 0.2 percent on Tuesday morning. This is expected to go higher as the sanctions bite harder in the coming days.
According to US National Security Adviser(NSA), John Bolton, the measure blocks about $7 billion in assets for Petroleos de Venezuela, S.A. — the parent company of the US-based Citgo oil company, and would result in more than $11 billion in lost assets over the next year.
“The United States is holding accountable those responsible for Venezuela’s tragic decline,” US Treasury Secretary, Steve Mnuchin said.
“PdVSA has long been a vehicle for embezzlement, for corruption for Venezuelan officials and businessmen. Today’s designation of PdVSA will help prevent further diversion of Venezuela’s assets by Maduro, and will preserve these assets for the people of Venezuela where they belong,” Mnuchin added.
Venezuela has been enmeshed in crisis, following widespread demonstrations against president Nicholas Maduro and the declaration of opposition, parliament-backed Juan Guaido as interim president. The United States and several South American counties have recognized Guaido as Venezuela’s leader while Maduro continues to hold on to power.
Venezuela has the world’s biggest proven oil reserves and is a member of the Organization of the Petroleum Exporting Countries (OPEC).
There have been concerns that the execution of the 2019 budget may encounter serious threats as the price of oil hovered below the $60 benchmark in December 2018.
While the problem in Venezuela has been tragic for the South American country, it may be a blessing in disguise for the Nigerian government.