The Mexican government has begun studying the possibility of stepping in to replace the PetroCaribe oil agreement between Venezuela and the Caribbean if the government of President Nicolas Maduro was to fall.
That’s according to three officials with knowledge of the plan who spoke with Reuters news agency last Friday.
The reported Mexican plan comes amid the growing pressure on the increasingly dictatorial Maduro regime.
In a report last week, Reuters says Mexican officials have started discussions on a possible design by which that country could sell low-cost crude and other oil products to Petrocaribe clients in the Caribbean and Central America.
According to Reuters’ sources the discussion involving Mexico’s Finance, Energy and Foreign Ministries is just a few weeks old.
It’s a response to what several believe could be a collapse of the Maduro led Venezuelan government which could inevitably take the Petrocaribe agreement with it.
Reuters says it’s been informed by officials that the move by Mexico to possibly replace Petrocaribe is a way for the world’s 11th biggest oil producer to acquire regional allies.
It argues that Petrocaribe nations’ loyalty to Venezuela has prevented Mexico and allies from winning enough votes to censure Venezuela in the Organization of American States, OAS.
According to the report, even though the plan is in its infancy and may not come to fruition, talk of it could chip away at Maduro’s already weakened support.
Reuters argues that Mexico has dropped years of hands-off foreign policy to push against Venezuela in the hope that its efforts will be recognized during the crucial re-negotiating of the North American Free Trade Agreement, NAFTA.
The Petrocaribe agreement which was launched in 2005 by then President Hugo Chavez supplies countries with oil under a flexible credit mechanism.
It allows Caribbean states such as Jamaica to pay cash up front for only a portion of each oil shipment with the balance being financed at low interest rates over a long period of time.
But the agreement is now regarded as being on life support.
A collapse in oil prices has caused a major recession in Venezuela with President Maduro’s administration facing months of deadly protests amid allegations of dictatorship.
In April, Jamaica’s Foreign Affairs Minister, Senator Kamina Johnson Smith, told journalists that Jamaica was only importing approximately 13-hundred barrels of oil per day down from 23 thousand from Venezuela.
This means Jamaica is currently paying for the majority of its oil imports up front at full market price.