Venezuela is strapped for cash. And the country is facing deadlines on critical payments that, if missed, would result in the country defaulting on its debt.
The nation’s state-owned oil company PDVSA just made a payment of more than $800 million to one of its bondholders. On Nov. 2, another bond payment is due — this one to the tune of more than $1 billion.
But Venezuela and its entities already missed nearly $600 million in payments this month, which some say is a sign Venezuela is close to defaulting.
Venezuela’s primary moneymaker, oil, has dropped in price over the last few years. To make matters even worse, the country’s financial woes have made it even harder to refine and sell oil.
Earlier this year, the United States sanctioned Venezuelan leaders, its oil industry and even President Nicolás Maduro himself surrounding what critics called a move away from democracy.
Venezuela’s oil sales to the U.S. have dropped by more than one-third since the sanctions took effect, though the country’s current situation has much more to do with years of mismanagement, falling oil prices and growing political instability than anything else.
It’s estimated Venezuela’s central bank only has around $10 billion, with as much as half that value speculated to be illiquid assets like gold.
If Venezuela does default on its debt, foreign investors would be able to seize the country’s oil assets outside its borders.