Venezuela's Economic Crisis Keeps Getting Worse

The origin of this economic collapse, framed in the context of the Great Recession, years after the improvement of the extraction of unconventional hydrocarbons in the United States, showed a macro-economic phenomenon of great importance for the region. From China's slowdown, a steady increase in oil production and stable demand, generated a surplus of this resource that caused a drop in prices of reference crude oil, WTI and Brent, falling in 2014 from $100 a barrel to $50 a barrel, causing unfavourable changes in the economy of Venezuela. 

Due to high oil reserves, lack of policies on private property and low remittances, by 2012, of every 100 dollars, more than 90 came from oil and its derivatives. With the fall in oil prices in early 2015 the country faced a drastic fall in revenues of the US currency along with commodities. In addition, the government has not made policy changes to adapt to the low petroleum price. In early 2016, the Washington Post reported the official price of state-retailed petrol was below US$.01 per gallon, and the official state currency exchange rate valued the US dollar at 1/150th what the black market did.