Venezuela’s crude oil production
Venezuela is OPEC’s eighth-largest crude oil producer. Reuters estimates that Venezuela’s crude oil output decreased by 50,000 bpd (barrels per day) to 1,450,000 bpd in May—compared to the previous month. The country’s crude oil production is near a 15-year low.
Venezuela’s crude oil exports fell 5.6% to 1,170,000 bpd in May—compared to the previous month. The possibility of new US sanctions on Venezuela and slowing exports have partly helped oil prices since June 6. WTI and Brent oil prices have increased ~2.1% and ~1.5%, respectively, since June 6.
Venezuela’s oil production declined 57.5% or by 1,963,000 bpd from its record high hit in December 1997. Venezuela’s production has declined by 750,000 bpd or 34% in the last two years.
Relatively low global oil prices, high debt, a lack of investment in crude oil exploration and production activity, port congestion, electricity outages, and high inflation pressured Venezuela’s oil industry. Replacing technical people with a military commander to run PDVSA and mass employee resignations have pressured the country’s oil industry.
Venezuela’s oil minister expects that the country’s crude oil production could increase to ~2,400,000 bpd in 2018. However, high debt and mismanagement of Venezuela’s oil industry led to lower production in the last two years. As a result, a turnaround in production isn’t likely. A decline in Venezuela’s production could support oil prices.
Next, we’ll discuss some crude oil price forecasts.