Insight from Washington: Does Venezuela need to hit rock bottom to find oil recovery?

For months, the Trump administration resisted calls to sanction crude flows out of Venezuela, fearing the US would be blamed for the ultimate collapse of the South American nation’s once-mighty oil sector. Venezuela’s oil industry was already teetering towards disaster – there was no need for US policy to push it off the cliff. By the time Trump administration officials unveiled sanctions on PDVSA, Venezuela’s state-owned oil company, in January, the country’s oil output had fallen below 1.22 million b/d, down roughly 800,000 b/d since President Trump’s inauguration and roughly half the level of production when President Nicolas Maduro came to power in 2013. Since the sanctions were imposed, output has sunk further, dipping to a 16-year-low of 740,000 b/d in March, according to an S&P Global Platts survey. And if the US chooses to impose secondary sanctions, which they also have been considering for months, Venezuela’s oil output could fall to 500,000 b/d by the final quarter of 2019, according to S&P Global Platts Analytics. Still, the Trump administration continues to stress that the decline is not due to US policy. “This is a problem that is seven years on,” US Secretary of State Michael Pompeo told reporters in… continue reading

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Source: CTRM Center

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