Revised Article:
Venezuela's Oil Production Declines as India Anticipates Increased Imports
Welcome to the latest scoop on Venezuela's oil industry! Here's what's sizzling in Caracas as of February 12, 2025:
Venezuela's oil production took a minor dip last month, according to the recent OPEC monthly report. The South American country's February output was measured at 892,000 barrels per day (bpd), a 18,000 bpd decrease compared to the previous month. Keep in mind, though, that this figure differs slightly from the 1,030,000 bpd figure reported by state oil company PDVSA.
PDVSA's higher figures might be due to the ongoing debate about the inclusion of natural gas liquids and condensates in the production numbers, a controversy that has been brewing for years.
Last month also witnessed a surge in crude exports, with more shipments headed to China and the US. However, some insider whispers suggest that operations have recently slowed down due to light crude shortages. To counteract this, PDVSA has resumed imports of these crucial inputs necessary for its export-oriented blends.
Venezuela's oil output remains close to the highest mark seen since the early 2019 US export embargo. The US government's sanctions, which include financial restrictions, secondary sanctions, and even an export embargo, pushed the production to an all-time low of around 350,000 bpd in mid-2020. However, steady improvements have been observed since then.
Despite this progress, PDVSA's ability to expand production and exports continues to be constricted by these US sanctions. For instance, the General License 44 (GL44), a waiver that allowed Venezuela to sell crude freely without resorting to deep discounts or questionable intermediaries, was not renewed by the Biden administration in April 2024. This reimposition of restrictions came after allegations that the Nicolás Maduro government had failed to meet an agreement with the US-backed opposition.
Donald Trump's return to the White House has reignited talks about harsher sanctions against Caracas. Trump, in his first term, championed a "maximum pressure" approach aimed at triggering regime change. There are rumblings that the US could stop buying oil from Venezuela altogether.
Officials like Secretary of State Marco Rubio have hinted at the possibility of withdrawing Chevron's Treasury Department license to operate and sell crude from its Venezuela joint ventures. The Biden White House had issued this waiver in November 2022, with automatic renewals every six months. This move was the only significant departure from its predecessor's sanctions policy.
While Chevron has kept mum about its discussions with the Trump administration, insiders have acknowledged that the corporation is "in contact" with the administration regarding its objectives and limitations. Chevron currently holds minority stakes in four joint ventures responsible for about a quarter of the nation's total crude output.
India: Ready for More Oil?
India has shown optimism about increasing oil imports from Venezuela. Venezuela has long targeted India as a prime market for crude exports, but the US secondary sanctions and skittishness have stalled agreements in the past.
During the India Energy Week, India's Minister for Petroleum and Natural Gas Hardeep Singh Puri expressed his confidence that the flow of Venezuelan crude to the South Asian giant will increase. "[Indian companies] have dealt with the Venezuelan oil sector in the past, and now, all the signals suggest that the constraints are easing," Puri stated.
Venezuela's Vice President and Oil Minister Delcy Rodríguez attended the India Energy Week to discuss potential investment opportunities in the country's energy sector. Rodríguez expressed her belief that Venezuela's oil resources should serve the nation's development, stating, "The times have shown that those who wanted to sideline Venezuela from the international energy formula are wrong."
Rodríguez had visited India in October 2024 to discuss joint energy projects. So far, only Reliance Industries, India's largest refiner, has received a US Treasury Department green light for Venezuelan crude imports since the reinstatement of wide-reaching sanctions in April 2024. Reliance Industries has been importing crude and executing oil-for-naphtha swaps with PDVSA.
Other Indian enterprises, such as the state-owned Oil and Natural Gas Corporation (ONGC), have lobbied for similar permissions. In addition, Amos Global Energy Management has reportedly purchased a minority stake in the PetroParia venture from China's Sinopec. The US firm will now hold 40% of PetroParia's shares, with PDVSA owning the remaining 60%. However, the purchase and future investments are still pending US Treasury approval.
In a nutshell, the current state of US sanctions on Venezuela's oil industry is undergoing significant changes, which could impact global trade. While India is not directly affected by the internal dynamics of US sanctions, potential "secondary tariffs" could indirectly impact Indian trade policies and energy sourcing strategies if India continues to import Venezuelan oil after April 2, 2025. Stay tuned for more updates! 🚀
Drafted by Jose Jota from the bustling city of São Paulo, Brazil
- Despite the ongoing discrepancies between the reported oil production figures by OPEC and Venezuela's state oil company PDVSA, Venezuela's oil exports of condensates witnessed a surge last month, with more shipments going to China and the US.
- Amos Global Energy Management, an India-based firm, recently purchased a minority stake in PetroParia, a joint venture between China's Sinopec and PDVSA, with the aim to boost Venezuela's exportable crude oil and condensates to India.
- Despite the escalating sports diplomacy between India and Venezuela, the potential "secondary sanctions" on Venezuela's oil industry might still pose concerns for Indian companies involved in oil trade, as they may be subjected to discrepancies with the US regulations upon continued crude oil imports from Venezuela after April 2, 2025.
