Over the weekend, the rise in tensions between neighboring
Colombia and Venezuela dominated
headlines. Venezuela started by closing several border crossings but then
escalated the situation by deporting Colombians from the Venezuelan border
state of Táchira. The Venezuelan government has deported more than a thousand
Colombians, but more than 7,000 Colombians have voluntarily decided to leave
for fear of being forcibly expelled.
Venezuela is one of Colombia’s largest trade partners,
and although trade between the two countries has dropped steadily since 2012
along with the Venezuelan economy, this latest conflict could greatly
exacerbate the situation. Colombia’s impoverished and rebel-ridden Norte de
Santander department will likely be the hardest hit. This border region depends
heavily on trade with Venezuela, and the conflict combined with the
newly-arrived refugees will make it even harder for Norte de Santander to work
on its 40% poverty rate.
In oil-related news, Mexican newspaper 20
minutos reported on the beleaguered Colombian oil industry. The report
focused heavily on Colombia’s dwindling reserves, warning that Colombia will
run out of oil unless it dramatically increases oil exploration and soon.
Additionally, Colombia
Reports noted that Chilean oil company GeoPark limited announced a
discovery of a new oil field in Colombia’s Llanos region. For the most part,
the Colombian oil industry has focused on offshore exploration, so this
announcement will be very welcome.
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