What would appear to be a concerted attempt to resurrect the so-called PetroCaribe plan through which Caribbean Community (CARICOM) countries once received oil from Venezuela on credit and at concessionary prices is beginning to do the rounds in parts of the region even though there is still little evidence, up to this time, of anything resembling region-wide enthusiasm for the idea.
Initiated in June 2005 under the presidency of the late Venezuelan President Hugo Chavez, PetroCaribe was initiated at a point in time when high oil prices were strangling the economies of member countries of the CARICOM and when a Venezuelan political administration, under pressure from the United States over its leftist leaning, was only too happy to press its vast oil reserves into service to extend its influence among member countries.
PetroCaribe offered CARICOM, oil supplies at concessionary prices and under generous credit terms. The Plan did much to help to protect fragile regional economies from the pressure of unaffordable oil prices. By 2019, however, PetroCaribe began to fold under a combination of Venezuela’s significantly reduced production and refining capabilities and Washington’s disapproval of a deal between CARICOM and a political administration in Caracas it opposed. Since then, continued disapproval of the successive leftist political administrations which eventually led to the imposition of US sanctions that badly hampered the country’s oil exports, put paid to the continuity of oil supplies to the Caribbean on concessionary terms.
The idea of reviving a PetroCaribe-like arrangement between Venezuela and CARICOM would appear to have been ‘floated’ by St. Vincent and the Grenadines Prime Minister, Dr. Ralph Gonsalves, who simultaneously announced what appeared to be the imminent arrival in his country of 23,000 barrels of oil under the PetroCaribe agreement. Additionally, the St. Lucian Prime Minister had stated earlier this year that Caracas had agreed to cancel his own country’s debt under the PetroCaribe arrangement, an initiative which the St. Lucian Prime Minister would doubtless have welcomed.
Outside of Guyana, which is now reaping the benefits of its own major successive oil discoveries since 2015, CARICOM countries (Trinidad and Tobago being the other exception here) have been struggling with high oil prices, to the extent where a Jamaican opposition spokesman is reported to have recently urged the political administration in Kingston to engage Caracas on the issue of reliable oil supplies at affordable prices.
Whether the idea of a PetroCaribe 11 will win the approval of CARICOM, however, is unclear given what may well be a regional concern over the likely reaction of the United States, given that country’s protracted icy relationship with the Maduro administration in Venezuela.
That said, the very recent decision by the Organization of Petroleum Exporting Countries (OPEC) to reduce its oil production by two million barrels, would have had the effect of further global oil price increases, arguably, creating greater pressure on CARICOM countries to take the idea of a PetroCaribe 11.
The region, with the exception of Guyana and Trinidad and Tobago would be contemplating whether it would want to follow St. Lucia down the road of a PetroCaribe 11 deal, given not just the likely US response but the increased intensity of the anti-fossil fuel lobby manifested at the recent COP27 forum in Egypt.
