Venezuelan Oil Production Comes Back to Life

In 2020, like many of us sitting at home in our oversized sweats, Venezuelan oil production appeared to have hit rock bottom. But like a phoenix rising from the athleisure ashes, the oil giant may finally be on the rebound.

Background: For the better part of a decade, Venezuelan oil production has been on a sharp downward trend, leaving an economic crisis in its wake. But since 2020, production in the country has been quietly increasing, approaching 1 million barrels per day for the first time in over four years.

• It’s a milestone, but still a far-cry from the over 3 million barrels per day that the country achieved through the late 90s and early 2000s.

Venezuela has the largest oil reserves in the world, even topping giants like Saudi Arabia, Canada, and the United States. But between commodity prices, corruption, and strict sanctions imposed by the US, the country has been forced to leave its vast reserves largely untouched.

A change of heart

When oil prices spiked in response to the war in Ukraine, the Biden administration began loosening its sanctions, going as far as allowing US-based Chevron to resume operations in the country.

• Although the global market was in need of oil and gas to make up for the Russian supply deficit, the move has also been criticized as “trading one dictator for another” by using another authoritarian regime rather than a democratic nation to supplant Russian supply.

Zoom out: Although production appears to be on the rebound, Venezuela still produces less than a million barrels per day in a world that consumes over 100 million. The country has a long way to go to return to three million barrels per day (and beyond).

Venezuela might have graduated from the rock-bottom full sweatsuit, but they’re still wearing pajama pants and a suit jacket on their Zoom calls.