The global energy crisis has seen the re-emergence of Venezuela’s oil and gas industry, dragging the country out of more than a decade-long economic slump.
A LatinFocus Consensus Forecast conducted by FocusEconomics sees the Spanish-speaking nation’s economy expanding by 9.8% in 2022, and a further 5.4% in 2023. And those projections also line up with a recent analysis conducted by Bloomberg, indicating that the country’s gross domestic product will see an 8.3% growth this year.
Soaring crude prices have seen Venezuela reaping major benefits for its economy; the country has managed to significantly boost its output; in fact, it has doubled over the past two years.
A report from the Organisation of Petroleum Exporting Countries (OPEC) outlined that the country produced 680,000 barrels per day (bpd) in April – 22,000 bpd more than its output in March. Venezuela’s national oil company, PDVSA, also registered a 788,000-bpd output in April, 33,000 bpd higher than the previous month.
However, it is still a far way from where the country’s production once stood.
The country has the world’s largest proven crude reserves – 298.4 billion – and once pumped a whopping three million bpd.
But Venezuela’s Oil Minister, Tareck El Aissami hopes to push production to two million bpd by 2022’s end. And this seems likely as the Joe Biden-led US government removed sanctions on Venezuelan crude as it looks to source alternatives to replace what Russia supplied.
Russia was slapped with an import ban that extended to its massive oil and gas resources because of its invasion of Ukraine. Russian oil and petroleum product exports to the US represent about 8% of all the US’s imported oil, and less than 2% of the total US supply.
Now, the Biden administration has to fill the void of the roughly 670,000 barrels a day in lost Russian oil and oil products while also cushioning consumer pockets from rising gasoline prices.
Industry experts have been arguing how ending all sanctions against Venezuela would play out. Some believe that it can potentially balance out the US’s oil supply and could lower oil and gas prices. Others see it as a show of weakness to US enemies.
But one fact remains. With eyes on Venezuela’s crude, the country could quickly reclaim its olden place in the global oil market.