Venezuela oil production falls as US sanctions bite
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Venezuela’s oil output sank to a new long-term low last month due to US sanctions and blackouts, the country told OPEC, deepening the impact of a global production curb and further tightening supplies.
Supply cuts by OPEC and partners led by Russia, plus involuntary reductions in Venezuela and Iran, have helped drive a 32 percent rally in crude prices this year, prompting pressure from US President Donald Trump for the group to ease its market-supporting efforts. In a monthly report released yesterday, the Organization of the Petroleum Exporting Countries said Venezuela told the group that it pumped 960,000 barrels per day in March, a drop of almost 500,000 bpd from February.
The figures could add to a debate within the so-called OPEC+ group of producers on whether to maintain oil supply cuts beyond June.
A Russian official indicated this week Moscow wanted to pump more, although OPEC has been saying the curbs must remain.
OPEC, Russia and other non-member producers are reducing output by 1.2 million bpd for six months from January 1. The producers are due to meet on June 25-26 to decide whether to extend the reduction.
One of the key Russian officials to foster the pact with OPEC, Kirill Dmitriev, signalled on Monday that Russia wanted to raise output when it meets OPEC in June because of improving market conditions and falling stockpiles. OPEC+ returned to supply cuts in 2019 out of concern that slowing economic growth and demand would lead to a new supply glut. OPEC’s report lowered its estimate of global growth in demand by 30,000 bpd to 1.21 million bpd, citing a slowdown in developed economies.
In a development that will ease OPEC concern about a new supply glut, the report also said oil inventories in developed economies fell in February,.
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