Venezuela’s oil export drops by almost 30%

Venezuela has been dealing with several problems within its oil industry for some time. One of them is the US sanctions, which affect exports in such a way that Venezuelan companies can mostly only export their products to countries immune to US sanctions, such as China.

That is far from the only problem. Another complication is the unstable situation in the country and, above all, the lack of investment in its oil facilities. They are therefore unable to carry out sufficient maintenance and modernization, causing more frequent downtime and problems.

In July, problems with power cuts added to all this, and as a result, oil exports fell by almost 30% to just 460 323 barrels of crude oil and refined products per day. Compared to July last year, this is a drop of even 38%.

Oil pump on background of flag of Venezuela

The problems are escalating

In June, Venezuela’s production was 706,000 barrels per day, with only 3 rigs reportedly in operation. This compares to 25 active rigs as recently as 2019. That’s how much the situation is deteriorating and if this trend continues, production could shut down completely in the near future.

However, Venezuela is one of the world’s bigger players in the market. And it has some of the world’s largest reserves of this commodity. However, since the economic situation does not look like it is going to improve, the question of divesting parts of the state-owned energy companies through the stock exchange is being raised.

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We are already seeing efforts to do this in other areas. For example, the Internet and telephone service providers Cantv and Banco de Venezuela are to sell 5% of their shares through the stock exchange in the coming period.

However, this is more difficult for energy companies, because by law these companies must be majority state-owned. It remains to be seen, therefore, whether, for example, only a small proportion of the companies will also be offered for sale or whether the laws will be changed.