The current global picture has haunted oil producers. The sum of a price war between global oil giants over the oil slump caused by the coronavirus epidemic has caused Latin American P&G producers to struggle to cover production costs, increasing the chances of cuts and delays investments in the coming months.
The price war is wiping out spot sales of heavy-duty Latin American types, tipping regional benchmarks like Mexico's Maya, while it dragged Venezuela's main oil company, Merey, to just $8 per barrel last week. Moreover, with fuel demand in the United States – Latin America's main oil market – declining as the country goes into isolation, the appetite for heavy oil from U.S. Gulf refineries has fallen.
"There will be no rapid recovery from these low prices," a Latin American oil trader told Reuters. "Now we are seeing the destruction of demand and we all know what comes after that: layoffs, production cuts and deferred investments," he added.