Venezuela’s respite after sanctions ease

The easing of US oil-related sanctions in 2022 and 2023 has meant a possible future change for upstream production in Venezuela. With Chevron’s licence to renew operations in the country, production has increased and crude oil exports to the USGC refineries have started again. With a tight oil market, heavy crude oil remains valuable to refiners. Eni and Repsol are the other IOCs that were recently allowed by the Venezuelan government to export NGLs (condensate) from the Perla field as payment for PDVSA-owed debt and as a way to incentivise a future increase in production in the asset. In any scenario of production recovery, PDVSA will need to attract investment from IOCs and NOCs already in the country. Future easing of sanctions will also depend on the Venezuelan government conducting negotiations with its domestic political opposition and a credible presidential election in 2024.