Venezuela feels the heat

Punishing US sanctions will continue to inflict heavy losses on the country’s oil sector

The Venezuela oil industry has been on a death spiral since 2016, with is roots in the short-sighted policies of presidents Hugo Chavez (1999-2013) and his successor Nicolas Maduro—made worse by the oil price fall of 2014. Both presidents destroyed the national oil company by politicising it, firing its most qualified workers and over-extracting resources from it. The partial expropriation of private operators and service contractors discouraged foreign investment in new projects. In 2019, the collapse trajectory was exacerbated by the imposition of oil sale sanctions by the US. In the last quarter of 2019, production had fallen to c.650,000-700,000bl/d, about half of the 1.3mn bl/d a year