HomeMediaLatest NewsA drop in the sea: lifting sanctions on Venezuela won’t keep on prices down

A drop in the sea: lifting sanctions on Venezuela won’t keep on prices down

24 October 2023

Salikhov Marcel R. President, Principal Director on Economic Studies, Head of the Economic Department

Marcel Salikhov, president of the Institute for Energy and Finance, made comments to the Izvestia newspaper about oil production in Venezuela.

According to him, a likely scenario is that Venezuela will be able to increase production by 150-200 thousand in the coming months, or by 20-25%.

— This will have a positive impact on the economy, as it will increase export revenues. An important factor will be the likely reduction in discounts, which for the Venezuelan Merey grade are about $ 20 per barrel to Brent.

The expert notes that the potential for production growth in Venezuela, which reached 3 million barrels per day in the early 2000s, is limited by the current state of the oil industry.

— Oil production has been steadily declining for 20 years, despite the fact that the country has the largest reserves in the world. Therefore, significant investments are required to change this trend and further sustainable growth. The Venezuelan authorities themselves do not have such funds. Global oil players, including those from China, have experience working in the country and will not be ready to invest significant new funds without changing the institutional environment, Marcel Salikhov believes.

He added that the current permissions of the US Treasury regarding the lifting of some sanctions are temporary. For large investors, this means that if the political situation changes, these sanctions can be easily returned.

You will receive notifications about the release of new materials on the site. We do not share email addresses with third parties and do not spam.
Thank you!
Your application is accepted.