I suppose embargoes on the oil (now owned by the government, now a big source of revenue) is what caused this to a large degree?
There are no embargoes on Venezuelan oil. I know this sounds insane, but the US has not embargoed Venezuelan oil, and in fact we buy a tremendous amount of oil from what Washington calls the enemy state of Venezuela.
The oil price collapsed, and this in part caused this horrible problem in Venezuela for a variety of reasons.
Venezuela is not alone. All oil producing states are suffering from the oil price crash, and furthermore all of Latin America is in a bad recession.
Incidentally the oil price crash itself was engineered by John Kerry and Joe Biden along with the Saudi royalty as a project to radically ramp up Saudi oil production in order to crash the world oil price as a way to destroy:
- Russia – Paybacks for Russia out of US fury over the Ukraine situation.
- Iran – Mostly a Saudi concern. The Saudis have always considered Iran to be their worst enemy, but the feeling is not mutual. I think the Iranians would just like to get along with Saudi Arabia and other Sunni states.
- Venezuela – Regime change Venezuela is a long term US project.
I am not sure what we offered the Saudis in return, I think maybe helping them with the Syrian regime change project. Also I think we might have given them a lot of weaponry.
The Saudis had their own reasons for doing this. They not only have huge oil reserves, but at the time, they were sitting on a huge pile of cash reserves in their Treasury. They figured they could ride out the price crash via dipping into cash reserves, which incidentally will be totally depleted in a couple of years.
However, the Saudis had a devious project in mind. Even though the plan was hatched with the Americans, bear in mind that capitalist countries generally have no allies, as the remainder of the paragraph will demonstrate. A major Saudi project was to crash the price of oil and hence ruin the US oil shale or fracking industry, which the Saudis see as serious competition. Fracked oil costs a lot to produce, and the Saudis have some of the lowest production costs in the world. By crashing the oil price, the Saudis could effectively bankrupt the US fracking industry, which is exactly what it happening right now.
The Saudis are morons though for doing that, as their own economy is getting screwed hard by the oil price crash.