Despite President Joe Biden lifting most sanctions on oil imports from Venezuela on Oct. 18, expectations for a significant surge in oil production by the country remains muted, according to the Energy Information Administration.
While the easing of restrictions opened doors for increased exports of the heavy, sour crude oil — of which there has been a recent shortage and notable price increase —Venezuela has been underinvesting and mismanaging its state-owned oil businesses for years and it is unlikely to be able to supply significant levels of oil to the U.S. in the immediate future, the EIA said.
Venezuela’s crude oil, once a staple in U.S. imports, witnessed a dramatic halt post-January 2019 due to the Trump Administration-sanctions on the socialist state oil company, Petróleos de Venezuela SA (PdVSA).
It was only in November of 2022 that the Biden Administration made concessions by granting Chevron waivers to resume exports from its joint venture operations in Venezuela. Subsequently, crude oil began flowing back to U.S. Gulf Coast refineries by January of 2023.
Earlier this month, Biden lifting most remaining sanctions, in exchange for the promise that Venezuela would have free and fair elections.
U.S. Gulf Coast refineries, particularly those under PdVSA’s U.S. subsidiary, Citgo, are set up for processing the heavy oil type that Venezuela produces. Citgo’s refineries, located in Lemont, Lake Charles, and Corpus Christi, boast a combined capacity of over 800,000 barrels per day.
However, a looming sale of Citgo’s assets on Oct. 23, intended to settle creditor claims against both Venezuela and PdVSA, might reshape the ownership dynamics of these refineries.
Historically, Venezuela’s crude oil production has seen a significant decline, tumbling from 3.2 million barrels per day in 2000 to 735,000 barrels per day in September. The South American nation now ranks as the 10th-largest producer in OPEC despite its abundant oil reserves.
Current EIA data from September indicates a dip in Venezuela’s oil production from its July high of 790,000 daily barrels. The drop is being attributed to a shortage of diluent, essential for processing the heavy oil.
With the sanctions now lifted, increased imports of diluents could offer a modest bump in output. A significant chunk of the anticipated growth is expected from Chevron’s joint ventures, with production forecasts reaching 200,000 b/d by the end of 2024.
Other ventures operated by ENI, Repsol, and Maurel & Prom might collectively add an additional 50,000 b/d in the near future, potentially taking Venezuela’s total output to roughly 900,000 b/d by 2024’s end.
Nevertheless, for Venezuela’s crude oil production to witness a more substantial and consistent increase, an injection of capital and regular maintenance of its aging infrastructure is considered essential. That appears to be unlikely, as Venezuela is not considered a stable investment.
So, do you want oil prices to be higher and want sanctions to stay in place? It is apparent that you aren’t happy no matter what!
Easy solution to high oil prices. All this administration has to do is lift the sanctions they placed on US produced oil. Funny how lifting your own oil is cheaper than importing.
Perhaps all of the Venezuelans that are trying to get in the US since Trump destroyed their economy will trickle to a unnoticeable drip.
Venezuela destroyed their own economy by turning to socialism, and have emptied their jails at our southern border. Anything other than that is a liberal talking point.
Why doesn’t Grandpa Bloodstains send our people down to do it for them? He’s done just about everything else possible to destroy our energy sector.
“Earlier this month, Biden lifting most remaining sanctions, in exchange for the promise that Venezuela would have free and fair elections.” Free and fair…hahaha… Dominion Voting Systems must have gotten the contract to count the ballots so that Venezuela can enjoy the same level of “free & fair” that gave us a decrepit, mentally incapacitated pedophile as president and a Congress filled up with idiots and clowns. At least they’ll be able to claim record voter turnout now, probably get more votes than existing voters but their Supreme Court can ignore all that just like ours did.
Qlaid much???
Hahahaha you’re trying hard to cope with all this aren’t you?
It’s gotta be hard to look at your friends and family and try to justify supporting crooked ol biden. Oh well another weekend at the beach should snap him back into reality.
Don’t worry about it. Frank says we produced more oil than ever in 2022…..you’ll be feeling the relief at the gas pumps any day now.
Also, can you believe a communist country took a deal with the U.S. and then turned their back on us???? Good thing the adults are back in charge…..ohh brother.
Oil wells are not like your kitchen sink faucet. You don’t just turn them on and get an immediate and indefinite full flow. It takes smart engineers to coax oil out of wells. Such smart people left VZ a long time ago.
Socialism will do that.
People with options will exercise them.
Too bad our oil causes climate change or we could be totally self sufficient. Guess they’d rather deal with this nonsense.
Our shale basins are almost all peaking but the number of oil rigs are at record lows. This does not bode well for future production. Its difficult to get financing for exploration, and the only leases coming up for auction are not in prime areas. The good news is that in an effort to boost diesel production, the refineries are generating lots of gasoline, so prices will probably come down.
Why would any oil company want to do business with the United States when this administration has vowed to shut them all down??? It takes millions and billions of $$$$$ to explore and produce petroleum. Not to mention all of the surveys and lawsuits and studies that have to be done. And biden wants to do business with Venezuela who has some of the dirtiest oil in the world! Doesn’t make sense since he’s so concerned about clean air.
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