How Have Petro Prices Stayed Stable While Crude Oil Falls Below USD 0?

Altcoins Venezuela

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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June 26, 2023

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The coronavirus pandemic has wrought financial chaos for all sorts of assets and commodities – including a massive crypto dip and plummeting oil prices.

But with a barrel of crude diving into the negative zone earlier this week before recovering – a crypto-related mystery is developing. How is that while cryptocurrencies experience volatility and oil prices tank, one token – the Venezuelan state-issued, oil-backed petro (PTR) – shows cast-iron resilience to the market pandemonium?

Despite the fact that Venezuela has fewer ways to export its oil reserves – and the fact that the oil market has bottomed out even in major oil-exporting nations – the price of PTR 1 remains almost exactly the same as when it was first issued.

Per the (government-run) petro calculator, a single petro token will currently cost you precisely USD 58.71. In fact, the official price of the petro has remained almost unchanged since Caracas issued the petro white paper back in 2018, where its price was listed as USD 60.

However, there are indications that not everyone buys the official line on crypto prices. Even government-owned banks appear to disagree. Criptonoticias reports that the state-run Banco de Venezuela’s exchange rate is closer to USD 39.2 to the petro.

Only a limited number of (again, state-approved) crypto exchanges currently allow Venezuelans to trade their petro tokens. Seven, to be precise, per the government’s crypto regulator. Puzzlingly (although one has recently closed down), none of these platforms currently lists a clear price for the petro.

Add to this the fact that Criptonoticias also reported in January that users on peer-to-peer crypto trading platforms such as LocalBitcoins have been looking to sell their petro holdings for up to half of what the government says they are worth.

P2P crypto trading platform Hodl Hodl has also been allowing users to advertise petro trades, disparaging referring to its policy of letting people dispose of their “shitcoins.”

Given the fact that the majority of the oil reserves that Caracas claims underpins the petro remain unbarrelled, underground and almost unsellable due to Washington-issued sanctions, it appears that the price of the petro – which is subject to strict United States sanctions – will formally remain at whatever levels Caracas determines.

The official petro calculator can be found here, in case you are curious about what the Venezuelan state believes your bolivars, bitcoin (BTC), yuan, rubles, yuan, euros or dollars are currently worth in this officially bulletproof token.