Venezuela has lost 30% of its foreign exchange revenue in dollars over the last month as a result of a “tremendous” drop in oil prices, Venezuelan President Nicolas Maduro said during a nationally televised address from Caracas on Thursday night, Bloomberg reports.
The average oil-export price for Venezuela last week fell to $72.80 per barrel, the lowest level in four years, which drove the yield on the nation’s benchmark bonds to nearly 19% for the first time since the global financial crisis, according to Bloomberg.
Foreign Minister Rafael Ramirez was recently dispatched on a five nation tour to campaign to defend oil prices, Maduro said.
Ramirez will visit five oil producing nations – including several non-OPEC (Organization of the Petroleum Exporting Countries) nations such as Mexico and Russia – to rally up support ahead of OPEC’s November 27 meeting.
“We are in a campaign to defend Venezuela, Venezuelan oil, international markets and the price of oil … Oil sustains the development of our economic and social life,” Maduro said.
Oil accounts for 97% of foreign exchange income in Venezuela, which the nation urgently needs to pay around $28.5 billion in bond principal that is due in 2016.
Due to a fall in oil prices, Venezuela will earn $16 billion less in 2015 than this year and based on the nation’s current spending rates they will need oil prices to rise to $110 a barrel in order to balance its accounts, a Jefferies analyst warned clients in a research note on Wednesday, according to Bloomberg.