Venezuela’s oil sector is facing significant challenges due to ongoing political instability in the country. The United States has announced plans to reimpose sanctions on Venezuela’s oil sector, citing ongoing crackdowns on opposition by President Nicolás Maduro. Despite having the world’s largest oil reserves and significant natural gas reserves, decades of mismanagement, lack of maintenance, and US sanctions have led to a significant drop in oil production in Venezuela.
Ten years ago, Venezuela was producing 2.9 million barrels of oil per day, but by 2020, production had dropped to just 400,000 barrels per day. With the easing of US sanctions earlier this year, production had increased to 800,000 barrels per day in the first quarter. However, following an agreement reached between Maduro and the US-backed opposition in Barbados that turned out to be an empty promise, major companies like Chevron, Shell, and Repsol had entered into agreements with Maduro’s government and state oil company PDVSA. While the US government plans to reintroduce sanctions on Venezuela’s oil sector, it will not disrupt existing deals between Chevron and PDVSA.
These developments highlight the complex relationship between Venezuela’s oil sector, international partnerships, and political decisions on production levels. Despite efforts by international partners to stabilize political conditions in Venezuela and increase oil production through joint ventures with state-owned companies like PDVSA
