Venezuela’s crude oil exports fell in July, Refinitiv Eikon data showed on Tuesday, as oil markets are on the prowl for additional oil supplies to ease the tight market.
Venezuela’s crude oil industry has been suffering for years due to a lack of maintenance and investment, in-country chaos, and U.S. sanctions. In July, power outages disrupted the state-run oil company’s operations, dragging the country’s oil exports down by 27% from June levels to just 460,323 barrels per day of crude and refined products, according to Reuters. That’s a 38% drop from July 2021 levels.
According to OPEC’s latest MOMR, Venezuela’s crude production fell to 706,000 barrels per day in June, according to secondary sources, with only three rigs in operation, compared to the 25 rigs in 2019.
Venezuela’s troubles don’t stop with power outages. Venezuela’s PDVSA, which is operating under a crude oil export ban, has already been struggling to keep its upgraders running, leading to a buildup of diluted crude stocks.
All of Venezuela’s exported crude oil heads to countries that are mostly immune from U.S. sanctions, such as China. The U.S. continues to try to suppress its crude exports by sanctioning vessels and companies that own the vessels that carry PDVSA crude.
While its economy and oil industry continue to flounder, Venezuela sits on top of the world’s largest oil reserves. With such riches, its oil and petrochemicals industry could find itself the target of Maduro’s latest efforts to sell pieces of state-owned companies through its stock exchange. The first such state-owned enterprise that will go up for sale is phone and internet provider Cantv and Banco de Venezuela, which will see 5% stakes up for grabs in the next few weeks.
The laws in Venezuela, however, require energy companies to be majority owned by the state, so a controlling stake would still be held by Venezuela unless that law is changed, should PDVSA find itself one of the companies that Maduro wants to sell chunks of.