US pressure threatens Venezuela’s oil exports, production
US President Donald Trump has accused Venezuela of channeling oil revenues into drug-related criminal activity and has pledged either to retain or sell oil that has been seized off the country’s coastline in recent weeks. Earlier this month, he announced a blockade targeting all sanctioned oil tankers entering or leaving Venezuelan ports.
The South American nation, already grappling with a prolonged political and economic crisis marked by hyperinflation and allegations that President Nicolas Maduro has consolidated power, has firmly denied any involvement in drug trafficking. Critics argue that the latest measures by Washington are designed to force Maduro, now in his third term, out of office.
Venezuela is estimated to hold about 303 billion barrels of proven crude oil reserves, the largest total in the world and nearly exceeding the combined reserves of Saudi Arabia and the United States, according to industry data. Most of these reserves are concentrated in the Orinoco Belt, a vast eastern region covering roughly 55,000 square kilometers.
Despite this enormous resource base, actual production remains far below potential. During the late 1990s and early 2000s, Venezuela regularly pumped more than 3 million barrels per day. Years of underinvestment, combined with US sanctions, have since driven output down to roughly 1–1.2 million barrels per day in 2025.
This year, production has continued to suffer from sanctions-related constraints, technical problems, aging infrastructure, and intermittent shutdowns. Estimates indicate output fell to around 860,000 barrels per day in November, down from just over 1 million barrels per day in October and close to that level in September. October marked the highest monthly production level since early 2019.
In global rankings, Venezuela placed 20th in oil production in 2023, accounting for about 1.1% of worldwide output. As of last month, it had climbed to 17th place, according to energy market assessments.
Export figures highlight the scale of Venezuela’s decline relative to other major producers. In 2023, crude oil exports were valued at just over $4 billion, far below those of leading exporters such as Saudi Arabia, the United States, and Russia, according to trade data.
State-owned oil company PDVSA reported foreign oil sales of $17.52 billion in 2024, largely from crude and fuel exports. This reflected an average export volume of around 805,500 barrels per day, representing a 15% increase compared with 2023.
China remains Venezuela’s dominant customer, purchasing roughly 80% of its oil exports.
Shipping figures for November showed that close to 746,000 barrels per day were destined for Chinese ports, underscoring Caracas’s growing reliance on Asian markets as Western sanctions persist.
After years of being effectively excluded from the US market, Venezuelan crude has returned in limited quantities following the issuance of special licenses to Chevron. These permits allow restricted operations and exports as part of a debt-repayment arrangement with PDVSA. Under this framework, US imports of Venezuelan crude have climbed to about 150,000 barrels per day since early 2023, a sharp contrast to the near-zero levels seen after sweeping sanctions were imposed in 2019.
Cuba remains a smaller but politically important destination, receiving an estimated 20,000–25,000 barrels per day of Venezuelan crude and refined products. These government-to-government shipments, often supplied on concessional terms, are vital to Cuba’s strained energy system and reinforce Havana’s close alignment with Caracas despite the modest volumes involved.
Beyond Cuba, Venezuelan oil has intermittently reached countries such as Spain, India, and Brazil. These deliveries are typically arranged through spot deals or complex trading structures involving intermediaries. Volumes fluctuate significantly due to logistical hurdles, refinery compatibility issues, shipping constraints, and shifting sanctions-compliance requirements. In many cases, cargoes are blended with other crude grades or routed through third parties to reduce traceability, highlighting the fragile and adaptive nature of Venezuela’s secondary export channels.
The collapse in oil output has had severe consequences for Venezuela’s economy, which remains heavily dependent on energy exports. The country continues to face widespread poverty, persistent hyperinflation, and shortages of essential goods.
Crude oil revenues accounted for 53% of total exports in 2023, amounting to just over $4 billion, based on trade estimates. Comparable data for 2024 has not yet been released. In 2022, oil revenues represented around 11% of total exports, valued at roughly $495 million. The year before, combined crude and refined petroleum exports totaled about $1.1 billion, making up 24% of overall exports.
In 2020, oil revenues reached approximately $4.12 billion, accounting for 70% of total exports. In 2019, when the Trump administration first imposed broad measures targeting Venezuela’s oil sector, oil earnings stood at $16.4 billion, representing 88% of export revenues that year.
To keep the economy afloat, the government has resorted to austerity measures and sought financial backing from foreign partners. Inflation has remained above 100% for an extended period, and renewed tensions with Washington have triggered another surge in consumer prices. Inflation jumped to 556% in the 12 months through December 17, up from 219% at the end of June and just 45% in 2024, according to market-based inflation tracking.
Relations between Washington and Caracas have further deteriorated as the United States has intensified surveillance and enforcement against oil shipments linked to Venezuela, raising concerns about possible disruptions to global crude supplies.
US forces operating in the Caribbean are reportedly pursuing a "dark fleet" tanker—vessels accused of evading sanctions—in international waters near Venezuela as part of the blockade.
If seized, it would be the third Venezuelan tanker taken by US authorities this month.
US officials argue that proceeds from illicit oil sales help fund criminal networks, a claim Venezuela has rejected. While the country represents only a modest share of global oil supply, traders warn that stricter enforcement could delay loadings, force cargoes to be rerouted, and increase shipping risks.
With exports estimated at around 900,000 barrels per day, any sustained disruption could push oil prices higher as markets factor in growing uncertainty. For Venezuela itself, a prolonged blockade would be especially damaging, as nearly all of its oil exports depend on maritime transport to reach foreign buyers.
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