The fear of a global recession, triggered by the "Independence Day" announcement made by US President Donald Trump, was starkly reflected in a drop in oil prices that, with good reason, indicates a greater advance of the structural crisis of the world economy than the speculative movements of Wall Street.
The vaunted announcement of making the US the strongest nation again through the unilateral and discretionary application of tariffs on most countries on the planet caused the prices of key crude oil benchmarks to plummet by more than $10 in the week ending April 11, placing them as much as $30 below the values projected in the budgets of the main OPEC and non-OPEC producing countries.
“With Brent crude oil falling to $63 per barrel, the main producers in the Gulf region, as well as Brazil and Nigeria, are seeking to contain the consequences of the price drop. Saudi Arabia set a break-even price for its budget at $91. The Russian Central Bank has said it could severely impact the economy,” notes the Oil Price website, “Oil-producing countries struggle to avoid an economic crisis after the price collapse.”
The Venezuelan crude basket, composed of Merey16, Boscán, and Hamaca grades, closed the week at $49,30, marking an average of $59,50 so far in 2025. The 2025 national budget is based on a barrel at $75. The OPEC basket reached $66,41 last Thursday.
The sharp drop in oil prices was accompanied by a Wall Street collapse just hours after the US Treasury Secretary issued a forceful defense of the tariffs. The sharp decline in the stock market led Trump to heed billionaire hedge funder Bill Ackman's advice to "pause the tariffs for 90 days rather than risk a 'self-induced economic nuclear winter,'" Bloomberg reported.
Ackman's concern about the coming of a "self-induced economic nuclear winter" was joined by the anguish of other billionaires from the so-called Deep State, those who wield power behind the scenes in the White House, who warned of an imminent recessionary impact on the economy caused by the barrage of tariffs imposed by Trump's team.
Trump then opted to lower tariffs on 75 countries to 10% for a period of 90 days, a period during which, according to the president, many presidents have already resorted to "kissing his ass" to negotiate new tariffs.
The announcement of the 90-day period immediately sent stocks soaring to their highest level since 2008, a surge that translated into a $304.000 billion increase in wealth for the richest individuals, the largest single-day gain according to the Bloomberg Billionaires Index.
But the 90-day period is just that, a period, during which the uncertainties associated with Trump's volatile and fickle personality continue. While he lowered tariffs on 10 countries to 75%, he raised the tariffs on China to 145%.
The critical issue with tariffs is that they must be paid by US companies interested in importing goods from other countries. If they buy equipment worth $100 from China, when it enters a US port, the importer must pay 145% to the treasury: the cost of the imported good rises to $245, an additional cost passed on to the chain until it reaches the US consumer, resulting in higher inflation.
The inflationary effect, or rising prices for goods and services, tends to reduce sales, the impact on businesses resulting in lower labor requirements and higher unemployment. This context generates lower energy consumption, which translates into reduced demand for hydrocarbons.
“Three months ago, the International Monetary Fund offered its economic forecast for the coming year: the American economy was in better shape than all the others,” says the New York Times report titled “The United States and China Are Headed Toward a Monumental Breakup That Is Putting the World Economy on Tension.”
"Many analysts now see the possibility of a recession in the US. After Trump imposed harsh tariffs on almost every country, they expect higher inflation, higher unemployment, and slower growth in the United States," he added.
The recession implies lower demand for oil at a time when the International Energy Agency, which represents the major energy-consuming countries known as developed countries, revised its oil purchase growth downward, placing it at 900.000 barrels per day, compared to the previous 1,2 million.
In anticipation of adverse scenarios caused by the hostile U.S. policy toward Venezuela, and as a strategy toward a diversified economy less tied to oil revenues, the 2025 national budget reduced its dependence on oil revenues by 11%.
However, the application of the 15% tariff on goods exported by Venezuela to the United States seeks to nullify the favorable trade that Bolívar's homeland had achieved with the northern nation.
By the end of the first half of 2024, trade between Venezuela and the United States had been increasing for the fourth consecutive year, reaching $4.614 billion, with a surplus for Venezuela for the third consecutive semester, this time amounting to $541 million—an 11% close to the 15% arbitrarily decided and applied by Trump.
Compared to the first half of 2023, when total trade between the two nations was $2.610 billion, the amount represented a growth of 76,78% (USD 2.004 billion), according to figures published by the U.S. Census Bureau's USA Trade.
Figures published by the U.S. Trade Census Bureau indicate that total Venezuelan exports to the United States for the first half of 2024 reached 2.577 billion, representing an increase of 84,61% (1.181 billion), compared to the first half of 2023, when total exports reached 1.396 billion.
Oil exports represented 94,21% of total exports to the United States during the period January - June 2024, reaching a total amount of USD 2.428 million, which translates into a growth of 100,86% (1.219 million) compared to the total oil exports to the northern country during the same period January - June but in 2023, when the figure stood at 1.209 million.
