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There is a long road ahead to restoring Venezuela’s crude oil production to its former levels.
Following the capture of Venezuela President Nicolás Maduro and his indictment in the U.S., attention has shifted to the potential for a U.S.-led effort to bring oil majors back to a politically unstable country which nationalized many of their assets in 2007, and revive crude output that has fallen significantly in recent decades.
Venezuela currently produces an average of 0.8 million barrels (800,000 barrels) of crude oil per day, well below its peak of 3.5 million barrels per day in the 1990s. Oil production declined sharply following the 2007 expropriation of U.S. oil major assets. Production fell further during the global oil crash of 2014-2016, when crude prices fell by as much as 70%. Even as oil prices stabilized in the latter half of that decade, Venezuelan production did not recover, and its production took a further hit from the pandemic-triggered oil price decline in 2020.
In the past few years, Venezuela’s oil production has recovered slightly, but more important to the global market is its oil reserves. According to research firm Wood Mackenzie, Venezuela has at least 241 billion barrels of recoverable crude oil. Analysts at Bernstein say that figure may be as high as 300 billion barrels of proven reserves, among the largest in the world. “Venezuela has the potential to be an oil superpower,” according to a recent note from Bernstein.
