Caracas, May 16, 2024 – Venezuela’s oil production has seen a slight decrease for the second consecutive month, attributed to the reinstatement of US sanctions.
According to the latest OPEC monthly report, Venezuela’s oil output in April was measured at 809,000 barrels per day (bpd) by secondary sources, showing a decline of 13,000 bpd compared to March. However, this output remains close to the highest levels observed since early 2019.
The Venezuelan state oil company reported a slightly higher figure of 878,000 bpd for April, up from 874,000 bpd the previous month.
Since 2017, the United States has imposed various sanctions on Venezuela, including financial restrictions, an oil embargo, and secondary sanctions, with the aim of affecting the country’s primary revenue source.
In October 2023, the US Treasury Department granted a six-month waiver allowing limited transactions with Venezuela’s energy sector but warned against new investments. However, on April 18, the Biden administration reimposed broad oil sanctions, providing a 45-day wind-down period for affected firms.
The US government cited Venezuela’s alleged failure to meet commitments to an agreement with the US-backed opposition as the reason for the sanctions. The political disqualification of opposition figure María Corina Machado by the Venezuelan Supreme Court further exacerbated tensions.
The return of economic sanctions has led to a significant decrease in exports. Companies now require authorization from the US Treasury for transactions with Venezuela’s oil sector, with preference given to those already involved in the country, according to reports.
This policy benefits corporations such as Chevron, which received a specific license to expand operations and exports from its Venezuelan assets. Other companies, including Repsol, Eni, and Maurel & Prom, have also increased their Venezuelan operations in recent months.
The US’ top diplomat for Venezuela, Francisco Palmieri, reported a high volume of authorization requests, including from India’s Reliance Industries, which is seeking permission to import Venezuelan crude.
Despite the decline in production due to US sanctions, Venezuela has benefited from higher market prices for its Merey blend, particularly favored by Asian markets. This increase in crude prices has helped offset losses incurred from the need to use intermediaries for exporting cargoes.
Amid challenges posed by sanctions, Venezuela is reportedly accelerating its shift to cryptocurrency payments to secure transactions while barred from financial markets. However, reliance on intermediaries has also led to corruption allegations, with judicial authorities uncovering misappropriation schemes.
Venezuelan officials have consistently denounced sanctions and demanded their withdrawal, with criticism also coming from multilateral agencies like the UN Human Rights Council.
Venezuelan Vice President Delcy Rodríguez described sanctions as an “international embarrassment” during a United Nations Caribbean Regional Summit.
Despite the challenges, PDVSA President and Oil Minister Pedro Tellechea expressed determination to continue industry growth and build alliances despite US sanctions. Earlier this month, PDVSA and private firm A&B Oil and Gas launched a joint venture called Petrolera Roraima, aiming for significant output from fields in the Orinoco Oil Belt.
Caracas, May 16, 2024 – Venezuela’s oil production has seen a slight decrease for the second consecutive month, attributed to the reinstatement of US sanctions.
According to the latest OPEC monthly report, Venezuela’s oil output in April was measured at 809,000 barrels per day (bpd) by secondary sources, showing a decline of 13,000 bpd compared to March. However, this output remains close to the highest levels observed since early 2019.
The Venezuelan state oil company reported a slightly higher figure of 878,000 bpd for April, up from 874,000 bpd the previous month.
Since 2017, the United States has imposed various sanctions on Venezuela, including financial restrictions, an oil embargo, and secondary sanctions, with the aim of affecting the country’s primary revenue source.
In October 2023, the US Treasury Department granted a six-month waiver allowing limited transactions with Venezuela’s energy sector but warned against new investments. However, on April 18, the Biden administration reimposed broad oil sanctions, providing a 45-day wind-down period for affected firms.
The US government cited Venezuela’s alleged failure to meet commitments to an agreement with the US-backed opposition as the reason for the sanctions. The political disqualification of opposition figure María Corina Machado by the Venezuelan Supreme Court further exacerbated tensions.
The return of economic sanctions has led to a significant decrease in exports. Companies now require authorization from the US Treasury for transactions with Venezuela’s oil sector, with preference given to those already involved in the country, according to reports.
This policy benefits corporations such as Chevron, which received a specific license to expand operations and exports from its Venezuelan assets. Other companies, including Repsol, Eni, and Maurel & Prom, have also increased their Venezuelan operations in recent months.
The US’ top diplomat for Venezuela, Francisco Palmieri, reported a high volume of authorization requests, including from India’s Reliance Industries, which is seeking permission to import Venezuelan crude.
Despite the decline in production due to US sanctions, Venezuela has benefited from higher market prices for its Merey blend, particularly favored by Asian markets. This increase in crude prices has helped offset losses incurred from the need to use intermediaries for exporting cargoes.
Amid challenges posed by sanctions, Venezuela is reportedly accelerating its shift to cryptocurrency payments to secure transactions while barred from financial markets. However, reliance on intermediaries has also led to corruption allegations, with judicial authorities uncovering misappropriation schemes.
Venezuelan officials have consistently denounced sanctions and demanded their withdrawal, with criticism also coming from multilateral agencies like the UN Human Rights Council.
Venezuelan Vice President Delcy Rodríguez described sanctions as an “international embarrassment” during a United Nations Caribbean Regional Summit.
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