As if the oil industry of Venezuela is not in a bad enough place before now, the nation sitting on top of the largest oil reserves in the world is forced to slow already low oil production as well as suspend some blending. This is because its crude reserves are brimming as many clientele and shipping companies bend to the United States sanctions and stay away from doing trade with Venezuela.
PDVSA, the state oil firm has to recently cut back production and stop blending of the heavy crude at some joint projects with foreign oil firms, Reuter’s reports, inventory data, quoting industry sources, and inside PDVSA documents its reporters have seen.
The U.S. sanctions fundamentally prohibit the United States companies and persons dealing with Venezuela and its state oil firm. The move might lead to the U.S. imposing secondary sanctions against corporations doing trade with the Maduro government.
As a consequence, PDVSA’s list of patrons has shrunk notably, while shipping companies have become more and more reluctant to supply Venezuela with vessels to send its crude oil to overseas markets for fear of losing their insurance.
As per the new figures by OPEC’s secondary sources, the production of oil in Venezuela dropped by 43,000 bpd from July to 712,000 bpd in the month of August. This evaluates to 1.911 million bpd production in 2017 and for 2018 1.354 million bpd.
Unlike expectations of Venezuela, that it would improve its oil production by the end of 2019, as just expressed by its oil minister Manuel Quevedo, IHS Markit said in July that output might go down to below 500,000 bpd next year.