Venezuela returns to global oil stage, as US lifts sanctions amid world’s energy crunch

The US has been pushed to reconsider its ties with oil producers like Venezuela and Saudi Arabia, to mitigate dependence on Russian energy.

LARGEST PROVEN OIL RESERVES GLOBALLY

US President Joe Biden eased the Trump-era sanctions late last year, in exchange for democratic reforms in Venezuela.

This paved the way for a potential reopening of US and European markets to oil exports from Venezuela, which has the world’s largest proven oil reserves.

ORC Consulting Firm director and political analyst Oswaldo Contreras said: “The reality is that Venezuela became a real focus of attention for this reason. For the western world, it can be a relatively secure and trustworthy oil provider that can also support Europe.”

The South American country used to export 1.8 million barrels of oil to the US daily, two decades ago.

However, its oil sector contracted by about two-thirds in the last decade. It currently produces less than 700,000 barrels per day.

The relief in sanctions could eventually push that figure to over a million barrels.

Experts say, however, that it will likely take more than a year to hit the target, as the Venezuelan oil sector needs significant investment after years of mismanagement. 

An olive branch from the US could mean revenue for Venezuela, and oil for other countries that desperately need it.

In November, the US said it would allow Chevron, the last American company to operate in Venezuela, to start pumping oil in limited capacities there again.