CARACAS: Venezuela will remove five zeroes from the bolivar currency rather than the three zeroes originally planned, President Nicolas Maduro said on Wednesday, in an effort to keep up with inflation projected to reach 1 million percent this year.
The OPEC nation’s economy has been steadily collapsing since the 2014 crash of oil prices left it unable to maintain its socialist economic system that for years provided lavish subsidies while enforcing strict price controls.
Annual inflation in June topped 46,000 percent, according to the opposition-run Congress. The IMF said this week it could hit seven digits this year, putting it on par with the crises of Zimbabwe in the 2000s and Germany in the 1920s.
“The monetary reconversion will start on Aug. 20,” Maduro said in a televised broadcast, showing new bills that are to be released next month.
He said the overhaul would tie the bolivar to the recently launched state-backed cryptocurrency called the petro, without offering details.
Cryptocurrency experts have said the petro suffers from a lack of credibility because of a lack of confidence in Maduro’s government and the mismanagement of the country’s existing national currency.
The government has said it is the victim of an “economic war” led by opposition leaders with the help of Washington, which last year levied several rounds of sanctions against Maduro’s administration and a group of top officials.
The country’s high inflation rate has made it nearly impossible to obtain cash.
Venezuela’s minimum wage is now about the equivalent of $1 a month, which has left citizens across the country unable to eat properly or obtain basic medical care — fueling an exodus of Venezuelans seeking to escape the economic crisis.
The government had been prepared to cut three zeroes off the currency in June but postponed the measure at the request of banking industry leaders who said the financial system was not ready for the measure.
Maduro on Wednesday proposed an overhaul to the currency crimes law in order to improve the flow of foreign investments.
Economists routinely identify the exchange controls as a major hindrance to economic growth. The issue will be taken up by the country’s all-powerful Constituent Assembly, Maduro said.
He also said he was transferring a concession bloc of the vast Orinoco heavy oil belt to the central bank, which he said would help shore up the bank’s international reserves.
Venezuela to remove five zeroes from ailing currency
Venezuela to remove five zeroes from ailing currency
Saudi Aramco bolsters global oil market stability amid rising regional tensions
RIYADH: Amid growing logistical challenges facing the energy sector, operational moves by Saudi Aramco are emerging as a stabilizing factor in global oil supply.
The company has offered additional crude shipments on the spot market, a step analysts see as aimed at absorbing supply shocks and ensuring the continued flow of oil through key energy corridors.
The move aligns with Saudi Arabia’s long-standing role as a leading global producer and is intended to limit price volatility and maintain balance between supply and demand at a time of heightened geopolitical uncertainty.
Reuters reported that Aramco has offered more than 4 million barrels of Saudi crude through rare spot tenders, as tensions between the US and Iran disrupt Middle Eastern exports.
Mohammad Al-Sabban, former senior adviser to the Saudi energy minister, said the current surge in oil prices does not necessarily reflect an immediate shortage of supply. Instead, it is largely driven by what energy markets call a “geopolitical risk premium.”
Speaking to Asharq Al-Awsat, Al-Sabban said prices remaining above $100 per barrel reflect global anxiety that the conflict could expand and threaten future supply security.
He noted that higher prices, while boosting short-term revenues and fiscal surpluses for oil-exporting countries, also bring hidden costs. These include increased spending on security measures to protect oil infrastructure — costs that rise in a volatile regional environment where Gulf states face mounting security pressures.
Al-Sabban also pointed out that spot market sales are currently generating greater returns than long-term futures contracts. The uncertainty surrounding the conflict has led buyers to pay premiums for immediate deliveries, making spot transactions more attractive during the current crisis.
Strategic chokepoint
Shipping through the Strait of Hormuz, which carries roughly 20 percent of global oil supply, remains central to the crisis.
Al-Sabban warned that even a temporary closure of the waterway would inevitably reduce available supplies, potentially triggering panic in markets and forcing countries to draw from strategic reserves.
He recalled historical precedents, noting that during the Iran-Iraq war, energy markets became a hub for speculation, with negative economic consequences emerging later.
Asked whether the conflict represents a short-term economic opportunity or a broader risk for regional economies, Al-Sabban said the reality is a mix of both. High prices may offer temporary gains as long as oil remains above $100 a barrel, but a prolonged conflict could ultimately impose heavier economic burdens through rising logistical and security costs.
Flexible response
Financial and economic adviser Hussein Al-Attas said Aramco’s decision to release additional cargoes on the spot market reflects significant flexibility in managing supply and responding quickly to market shifts amid rising demand and concerns about potential shortages.
He told Asharq Al-Awsat that the move sends an important signal to global markets that Saudi Arabia continues to play the role of a swing producer, capable of intervening to maintain market balance and ease fears about supply security.
Al-Attas added that the recent surge in oil prices is largely tied to geopolitical tensions in a region that represents the heart of global energy supply.
While Brent crude could remain above $100 in the short term if supply concerns persist, he noted that history shows price spikes driven by political tensions are often temporary unless they lead to a prolonged disruption in supply.
Higher oil prices naturally increase revenues for exporting countries, potentially strengthening fiscal balances and enabling governments to finance spending and development projects, Al-Attas remarked.
Gulf states, particularly Saudi Arabia and the United Arab Emirates, may therefore benefit financially in the short term.
However, he cautioned that such gains are usually temporary rather than structural. Prolonged high energy prices can slow global economic growth by fueling inflation, which may eventually reduce demand for oil. As a result, the current price surge may represent a temporary financial opportunity rather than a lasting shift in oil revenues.
Ultimately, Al-Attas said the crisis carries two opposing dynamics: Gulf countries may benefit financially in the short term, but any wider regional conflict could pose greater risks to economic and commercial stability.
For that reason, he added, the region’s strategic interest ultimately lies in stable energy markets and uninterrupted oil flows, which are essential for sustaining global demand and supporting long-term economic growth.
