Oil Production in Venezuela improves to nearly 600.000 barrels per day

Venezuela’s oil production is bouncing back as experts condemned the ‘Devastating Sanctions’ that almost totally destroyed the Latin American oil reserve giant.

Mark Weisbrot, director of the Washington DC-based Center for Economic and Policy Research (CEPR), denounced the “terrible economic damage” US sanctions have caused in Venezuela.

However, the latest Organization of Petroleum Exporting Countries (OPEC) monthly report placed the Caribbean country’s May production at 531,000 oil barrels per day, a rebound from April’s 486,000 bpd, according to secondary sources.

In contrast, state oil company PdVSA communicated a higher number of 582,000 bpd.

The May figures are the highest in 12 months and put the nation back in the steady growth trend it has been experiencing since the beginning of the year after reaching historic lows in the second half of 2020.

Venezuelan authorities have declared that production recovery is a priority, and PdVSA set a 1.5 million bpd target by the end of 2021.

US sanctions that have caused output to fall steeply from an average of 1.9 million bpd in 2017 to 1.354 million, 796,000 and 500,000 bpd in 2018, 2019 and 2020, respectively.

Following financial sanctions against PdVSA in 2017, the US Treasury Department imposed an oil embargo in 2019 and a host of other restrictions since, including secondary sanctions, targeting shipping companies and other intermediaries.

The state oil company has likewise suffered from a brain drain, lack of maintenance, mismanagement and foreign backed corruption.

Washington’s sanctions against Venezuela have been classified as “collective punishment” and condemned by a number of international actors and multilateral organizations.

During a virtual conference dedicated to the illegality and consequences of unilateral coercive measures, UN Special Rapporteur Alena Douhan argued that sanctions stop countries from guaranteeing the well-being of their population.

UN independent human rights expert Alfred de Zayas stated that “there is no justification for the imposition of unilateral coercive measures,” adding that sanctions’ main purpose is to generate “extraterritorial effects” and attack human rights.

Likewise, Mark Weisbrot, director of the Center for Economic and Policy Research (CEPR) in Washington, D.C., denounced the “terrible economic damage” US sanctions have caused in Venezuela. He emphasized that despite the government’s policy “mistakes,” the level of devastation “has been a clear result of the sanctions.”

This is horrible in many ways because it has a very high human cost. It creates devastating effects, and because of its illegality, it even resembles an act of war.

Venezuela’s crisis has worsened since acute diesel shortages gripped the nation, following the Trump administration’s clampdown on crude-for-diesel swaps in October 2020.

As a result, food and medicine distribution, electricity generation and public transportation have been severely affected. Authorities have prioritized securing fuel for farmers and truckers.

The US measures against PdVSA have also stopped the country from importing naphtha, a product used as an input for refineries, contributing to fuel shortages.

According to a Bloomberg report, Venezuela is currently seeking to manufacture its own diluent by adapting its extra-heavy crude upgraders in the Orinoco Oil Belt.

The news outlet specified the plants used for this purpose would be Petropiar, jointly owned with US oil giant Chevron, and Petrocedeño, jointly owned with France’s Total and Norway’s Equinor.

To alleviate diesel and gasoline shortages, the Caribbean nation has likewise relied on shipments from allies to compensate for low domestic production.

However, US sanctions and threats have made imports increasingly difficult, with Washington going as far as to seize fuel cargo vessels bound for Venezuela.

According to Reuters, on May 23, the country received its first diesel shipment since November. The Djibouti-flagged tanker Bueno arrived in the Amuay port carrying almost 500,000 barrels of fuel. The vessel allegedly departed from Fujairah in the United Arab Emirates in April, 2021.

Venezuela Analysis / ABC Flash Point Oil Embargo News 2021.