Now This Happened: Venezuela Cuts Oil Output as US Embargo Halts Exports

Turning the tap on Venezuela news all the way open, now this comes out: The Venezuelan government-controlled oil extraction organization, Petróleos de Venezuela, S.A. (PDVSA) is having to cut oil production. Why? Because they are running out of storage space, and their exports have been cut off by the Trump administration and the War Department.

Venezuelan state-run oil company PDVSA has begun cutting crude production because it is running out of storage capacity due to an ongoing US oil blockade that has reduced exports to zero, piling more pressure on an interim government trying to hang onto power in the face of US threats of more military action.
Caracas is in political crisis under an interim government after President Nicolas Maduro and his wife were captured by US forces on Saturday. The OPEC country’s oil exports, its main source of revenue, are now at a standstill following a US blockade on tankers under sanctions and the seizure of two oil cargoes last month.
Chevron’s cargoes bound for the US had been an exception, continuing to move, because the company has a license from Washington for its operations. But even those have stopped since Thursday, shipping data showed on Sunday.

There are a couple of things to note in all this; first of all, Secretary of State Marco Rubio may well be raising his fist and shouting, "Called it!" Earlier on Sunday, we saw the Secretary speaking with ABC News' This Week anchor George Stephanopoulos, and the Secretary predicted precisely this:

The Secretary said:

We started using (leverage over Venezuela's oil trade) already. You can see where they are running out of storage capacity.

Here's the other thing: Venezuela is not, as the Post piece puts it, "...in political crisis under an interim government." There is no interim government; not yet, at any rate. There won't be until, ideally, the actual winner of Venezuela's 2024 election, Edmundo González Urrutia, assumes the office - or until new elections are held, and this time, hopefully, honest elections. What remains in Caracas is not and never will be a legitimate interim government. It is the remnants of a dictatorial regime that remained in power by force and by fraud, the old tools of dictators everywhere.

There can be no deals made with anyone left over from the Maduro regime.

So, the oil taps in Venezuela are, for the time being, closing.

As part of his announcement of Maduro’s detention and a government transition overseen by the US, President Trump said on Saturday that an “oil embargo” on the country was in full force.
PDVSA’s move includes shutting down oilfields or well clusters as onshore stocks mount and the company runs out of diluents to blend Venezuela’s heavy crude for shipment.
The company requested output cuts to joint ventures including China National Petroleum Corp.’s Petrolera Sinovensa, Chevron’s Petropiar and Petroboscan and Petromonagas, the sources said. Petromangas, previously operated by PDVSA and Russian state-run Roszarubezhneft, is being run solely by PDVSA.

So, while ousting an illegal regime from a South American country, the Trump administration has managed to stick a thumb in Russia's and China's eyes as well, and that's worth doing.

What we can really hope to come out of all this is that whoever takes over once the remnants of Maduro's junta are removed from power is that all of Venezuela's oil and gas industry should once more be private-sector operations. The PDVSA is a product of the Venezuelan government, before even Hugo Chavez, formed after the Venezuelan oil and gas industry was officially nationalized in 1976 under then-president Carlos Andrés Pérez, better known as El Gocho,or "The Pig." Draw what conclusions you like from that. That's a mistake that can and should be remedied as one of the first acts of a new government.

Finally, there's this:

PDVSA and CNPC did not immediately reply to requests for comment.

You don't say.

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