• US pressure, tanker seizures threaten exports, production growth and exacerbate economic woes

ISTANBUL

Venezuela, long considered the world's oil powerhouse, is facing intensified US pressure that threatens to disrupt exports, impede production growth, and exacerbate the Organization of the Petroleum Exporting Countries (OPEC) member's economic woes.

US President Donald Trump has accused Venezuela of using oil money to fund drug-related crime and promised to keep or sell the oil seized off its coast in recent weeks.

This month, he announced a blockade of all sanctioned oil tankers entering and leaving Venezuela.

The Caribbean country, which already faces a political and economic crisis, including hyperinflation and accusations of power grab by the incumbent president, Nicolas Maduro, denies involvement in drug trafficking.

Critics say the Trump administration's moves are meant to remove Maduro, who is serving a third term, from power.

How much oil does Venezuela have?

At an estimated 303 billion barrels, Venezuela has the world's highest proven crude oil reserves, almost surpassing those of Saudi Arabia and US put together, according to OPEC data.

The Orinoco Belt, a sizable area in the east covering about 55,000 square kilometers (21,235 square miles), is where the majority of Venezuela's oil reserves are located.

The country's actual output, however, is still only a small portion of its capacity.

Venezuela consistently produced more than 3 million barrels per day (bpd) throughout the late 1990s and early 2000s, but a lack of investment and US sanctions reduced output to between 1 and 1.2 million bpd in 2025.

This year, production has been affected by sanctions, technical difficulties, infrastructure limitations, and sporadic drops in output.

In November, the International Energy Agency (IEA) estimated that Venezuela produced 860,000 bpd – lower than 1.01 million bpd in October and around 1 million bpd in September.

The October figure marked a peak for Venezuela's crude oil production since February 2019.

In 2023, Venezuela ranked 20th globally in terms of oil production, with a 1.1% share in total production.

As of last month, it stood at 17th place in oil production globally, according to the IEA.

How much oil does it export?

According to data from the Observatory of Economic Complexity (OEC), Venezuela exported just $4.05 billion worth of crude oil in 2023. This is far below other major exporters, including Saudi Arabia ($181 billion), the US ($125 billion), and Russia ($122 billion).

The state oil company PDVSA reported oil sales abroad (primarily crude and fuel exports) at $17.52 billion for 2024, reflecting an average export volume of around 805,500 barrels per day (up 15% from 2023 levels).

China, which has supported Caracas in the current crisis, remains its largest buyer, accounting for around 80% of all oil exports.

Shipping data from Petroleum of Venezuela (PDVSA) for November showed that almost 746,000 bpd were going to Chinese ports, highlighting Venezuela's shift to Asia in the face of Western sanctions.

Meanwhile, after years of being effectively shut out by US sanctions, Venezuelan crude oil has re-entered the US market in limited volumes following the granting of special licenses to Chevron.

Under these permits, which allow Chevron to resume restricted operations and exports as part of a debt-recovery arrangement with Venezuela’s state oil company PDVSA, US crude imports from Venezuela have risen to around 150,000 bpd as of January 2023, according to data from the US Energy Information Administration (EIA).

The increase marked a notable shift from the near-zero levels seen after Washington imposed sweeping sanctions on Venezuela’s oil sector in 2019, which effectively severed direct crude trade between the two countries.

Cuba remains a relatively small but politically significant destination, receiving an estimated 20,000-25,000 bpd of Venezuelan crude oil and refined products, largely under government-to-government supply arrangements. These shipments are often structured on concessional terms and play an important role in supporting Cuba’s chronically strained energy system, making Havana one of Caracas’s most strategically aligned energy partners despite the limited volumes involved.

Beyond Cuba, cargoes have intermittently flowed to countries including Spain, India, and Brazil, typically through spot transactions or complex trading structures involving intermediaries. Volumes to these destinations tend to fluctuate widely from month to month, reflecting logistical constraints, refinery compatibility, shipping availability, and evolving sanctions-compliance considerations. In many cases, deliveries are routed through third-party traders or blended with other crude grades to reduce traceability, underscoring the adaptive but unstable nature of Venezuela’s non-core export markets.

Economic impact of drop in oil production

Venezuela has suffered greatly as a result of the drop in oil production, as its economy greatly depends on oil exports. Caracas is dealing with widespread poverty, hyperinflation, and a lack of basic goods.

According to OEC data, crude oil revenues accounted for 53% of the nation's exports in 2023, with $4.05 billion. The OEC did not release data for 2024.

In 2022, oil revenues accounted for around 11% of the nation's overall exports, with a $495 million value. And in 2021, crude oil and refined petroleum revenues amounted to a combined $1.1 billion, with a 24% share in all of the exports.

In 2020, the combined crude and refined oil revenues amounted to $4.12 billion, with a 70% share in overall exports.

And in 2019, when the Trump administration first imposed sweeping oil sector measures, Venezuela saw $16.4 billion in total oil revenue, amounting to 88% of the nation's overall exports that year.

In order to maintain the economy, the government has been compelled to enact austerity measures and look to foreign partners for financial support.

Inflation in the country has been hovering above 100% for some time, but as a result of the recent tensions with Washington, consumer prices have again skyrocketed.

The inflation rate soared to 556% in the 12 months through Dec. 17, up from 219% at the end of June and 45% in 2024, according to a Bloomberg index.

What is US doing to Venezuela's oil?

Tensions between Washington and Caracas have been rising as the US stepped up surveillance and enforcement actions against oil shipments linked to Venezuela, raising fresh concerns over potential disruptions to global crude flows.

US forces in the Caribbean are currently said to be pursuing a "dark fleet" tanker – vessels trying to evade sanctions – in international waters near Venezuela as part of the blockade. If seized, it would be the third Venezuelan tanker taken by the US this month.

US officials argue that illicit oil revenues help finance criminal networks, a claim rejected by Caracas.

While Venezuela accounts for a relatively small share of global oil supply, traders warn that heightened enforcement actions could slow loadings, force cargo rerouting, and increase shipping risks.

With its oil exports estimated at around 900,000 bpd, any disruption could add upward pressure to oil prices, as markets weigh the growing uncertainty.

A sustained blockade could be devastating for the country, as nearly all of its oil supply to foreign markets is transported via ships.