HomeMediaLatest NewsThe prospects for Venezuelan oil on the world market

The prospects for Venezuelan oil on the world market

28 November 2022

Belogoryev Alexey M. Research and Development Director, Director of the Center for Energy strategic analysis and forecasting

Alexey Belogoryev, Deputy Principal Director on Energy Studies of the Institute for Energy and Finance, commented to Rambler/Finance on the prospects for the Venezuelan oil industry in terms of the US sanctions and their partial easing.

The specialist noted that Caracas, due to a number of reasons, will not be able to seriously increase production, so the role of Venezuelan oil on the world market will remain insignificant.

“Venezuela is now producing about 650,000 to 700,000 barrels per day at a fairly stable level. The government of the country's President Nicolas Maduro had plans to produce up to 1 million barrels, but so far they are hampered by the lack of not only investment, but also technology and personnel.

The Venezuelan oil industry has been in a very difficult situation in recent years, both due to the general economic crisis and the outflow of foreign companies. And now the country's government is trying in every possible way to encourage the inflow of foreign capital, including the preservation of Chevron on the market. But the participation of Western companies, including American ones, is facing the US sanctions. That is, in fact, the United States acts as a regulator here. By issuing temporary licenses for a particular type of activity, they regulate the participation of foreign companies - primarily American and partly European. And Venezuela itself can do little in this case. It solves problems in terms of oil refining, including through an agreement with Iran. Venezuela was able to solve logistical problems with the supply of its oil to certain Asian countries, primarily to China. This is done according to gray schemes, including transshipment in Malaysia, but we are talking about fairly small volumes. Still, production has declined several times in recent years,” Belogoryev notes.

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