Fears of an impending Venezuelan debt default are rising again this week as global market turmoil exacerbated the slump in global crude oil prices, Venezuela’s main export. Oil prices steadied this week after hitting six-year lows, but they are still a long way from what the country needs to revive its flailing economy.

Credit default swaps traders estimated that Venezuela and its state-run oil company, Petroleos de Venezuela SA, had a 73 percent chance of defaulting on its external debt before September 2016, compared to an estimate of 40 percent three months earlier, Bloomberg reported

This week’s drastic oil slump came amid global market panic over fears of a slowdown in China’s economy. Global crude prices rebounded sharply Thursday but remain under $50 a barrel, about half the value Venezuelan officials have said they need to get the nation's economy back on track. Economists have said the recent bounce doesn’t suggest any long-term recovery in oil prices. About 96 percent of the socialist country’s export revenue comes from oil.

Venezuelan officials have reportedly been pushing other members of OPEC to call an emergency meeting in light of this week’s market jitters, which saw oil prices fall to $40 a barrel, the Wall Street Journal reported. The government of President Nicolas Maduro previously tried, without success, to rally OPEC members to cut oil production and stabilize oil prices, which have drastically declined over the past year.




The ongoing economic crisis has prompted an uptick in store lootings in recent months as residents struggle to find medicines and basic household goods. But while Maduro has acknowledged the toll the oil price slump has taken on the economy, he has also blamed the shortages on hoarders and smugglers, accusing them of trying to foment an economic war.

“Venezuela is broke, but a disorganized default would be a disaster,” Venezuela’s former minister of planning, Ricardo Hausmann, told Financial Times last week. “The country needs an [International Monetary Fund]-led reform program that can put $20 billion or more on the table for the market to understand that Venezuela won’t go to hell. But that won’t happen with Maduro on the president’s seat.”