S&P Global Platts, a leading independent provider of information, benchmark prices, and analytics for the energy and commodities markets, said Thursday the prospects are low for the United States easing crippling sanctions on Venezuela, once one of South America’s most prosperous nations.
“S&P Global Platts Analytics sees low prospects for US sanctions relief while the Biden White House prioritizes other foreign policy issues and as Maduro’s ties with Cuba further complicate the matter for Washington,” Platts said.
Platts Analytics revised down its Venezuelan crude supply forecast by 70,000 b/d for September to end-2022, with production now capped at 600,000 b/d. An eventual fall to mid-2020 levels of 300,000 b/d would be unsurprising absent sanctions relief, it said.
The S&P Global Platts OPEC survey put June production at 550,000 b/d, up 10,000 b/d month on month.
Venezuela pumped 2.4 million b/d in 2015, before sanctions, mismanagement and widespread power outages decimated its oil sector.
Platts said the U.S. Treasury Department took modest action July 12 to ease the U.S. sanctions, allowing U.S. LPG producers to export supplies to Venezuela, where propane shortages have forced people to cook on wood stoves.
According to Platts, talks between Venezuelan President Nicolas Maduro’s government and his political opposition have been tentatively set for August 13 in Mexico, but analysts are skeptical they can break the country’s stalemate and create conditions for eventual U.S. sanctions relief.
With Venezuela struggling to ramp up its output, Guyana is now well on its way to securing a spot among South America’s biggest producers with a projection of hitting around 1 million barrels of oil per day by 2025. The new oil producing country is on course to become second only to Brazil for output on the continent.