Despite lifted sanctions on Venezuelan energy, don’t expect a boom in oil exports
Despite lifted sanctions on Venezuelan energy, don’t expect a boom in oil exports
The U.S. Energy Information Administration, or the EIA, says the recent lifting of most the sanctions on Venezuela’s energy sector will pave the way for the nation to export more crude oil.
Sanctions relief comes after representatives of Venezuela’s President Nicolas Maduro agreed to a roadmap aimed at free and fair elections there. But the EIA doesn’t expect a major surge in Venezuelan oil exports to the U.S. or anywhere else.
There’s plenty of demand for the sour, heavy crude oil that Venezuela produces, but getting it out is another matter.
The nation’s oil sector has weathered a long period of underinvestment and mismanagement, said Carla Bass of Argus Media, which tracks energy market data.
“Refineries have not been maintained properly for many years,’ she said. “Pipelines have not been replaced.”
The EIA says that’s likely to limit growth in Venezuelan crude production through the end of next year.
U.S. sanctions relief could give Venezuela better access to chemicals needed to dilute its crude as it’s processed, which have been in short supply, according to the EIA.
But the sanctions deal is set to last for just six months for now, which might not be enough to spur a long-term boost to production.
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