Venezuela's Cash Crunch Means Waiting Five Months to Get Paid
- PDVSA sales to U.S. down 35% since sanctions began in August
- Experience of Ecuador shows default could make situation worse
How Venezuela Has Managed to Avoid Sinking Into Default
Off the Caribbean island of Curacao, a huge tanker has been bobbing in the water for five months waiting to get paid by Venezuela’s state-owned oil company for its cargo of crude oil -- the latest sign that the nation’s cash crunch could get a lot worse as more debts come due.
Petroleos de Venezuela SA, which controls the world’s largest crude reserves, has been hit hard by low prices and U.S. sanctions that are increasing the risk of default on the country’s debt. Output plunged, PDVSA was forced to buy more cargoes from abroad to blend with its tar-like low-quality oil, and refineries were forced to shut because of recurring breakdowns or a lack of domestic crude to process. On Friday, PDVSA made a payment on a 2020 bond and it’s due to make another one on Nov. 2.