Petrocaribe is an oil alliance between Venezuela and 17 Caribbean countries that seeks to provide favorable trade deals for refined and unrefined petroleum. It formed in 2005, one year after many of the same countries created the Bolivarian Alliance for the Peoples of Our America, an economic alliance known as ALBA. It was created with the help of Cuba and was initiated by former Venezuelan president Hugo Chavez to foster an integrated economic system. ALBA also has its own digital currency, known as the Sucre, which was only used for the first time in 2010.
Petrocaribe does not offer a discount to member countries. Instead, it promises an extended timetable for payment, allowing countries to defer repayment for long periods of time, even decades. This structure has had a downside, though, allowing countries to rack up debt. In 2015, Jamaica had to sell $2 billion in bonds to pay down its debt to Venezuela. After Venezuela’s economy lagged due to falling oil prices, it began to seek some of the money it was owed through the Petrocaribe system, putting more pressure on member nations.
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