The United States continues on its path to cripple Russia. They decided to substitute Russian oil for Venezuelan oil in an announcement this week. On this, it hopes to deprive Moscow of revenue.

An import of 700,000 barrels/day to be met

In 2019, Washington imposed similar measures on Venezuela, whose production was almost entirely destined for the US market, in an attempt to oust Venezuelan President Nicolas Maduro, who is also a loyal ally of Vladimir Putin.

The war in Ukraine has reshuffled the cards and Washington is looking for alternatives to Russian oil, even if it means reviewing its policy. Thus, a high-level American delegation went to Caracas to discuss, among other things, the "energy security" of the United States, the White House acknowledged. And, perhaps, to try to distance Caracas from Moscow…

Increasing production

While Venezuela has some of the largest oil reserves in the world, oil expert Rafael Quiroz believes Venezuela "is not an option".

"For Venezuela to be an option, the country would have to have the capacity to increase its production," he told AFP, pointing out that current production has been directed, after the US embargo, to political allies like China and customers like India.

Once dubbed "Saudi Venezuela", the country, which has long been a large and flourishing producer, extracted only 755,000 barrels/day in January, according to the Organisation of Petroleum Exporting Countries (OPEC). Production had even fallen a few months ago to 400,000, its lowest level since the 1940s.

The authorities attribute the low production to sanctions, assuring that they are recovering, but most experts agree that the drop predates the sanctions and is the consequence of years of mismanagement and corruption at state oil giant Petroleos de Venezuela (PDVSA).

"This year we will produce two million barrels/day whether it rains or blows," Maduro promised on Wednesday. But Carlos Mendoza Potella, an oil economist, estimates that it would take "four or five years" to reach that goal.

Some of the exploitation sites are dilapidated, even abandoned, as AFP found in the western lake of Maracaibo, the cradle of the country's oil industry. Production now relies on the east of the country where the equipment is in poor condition, undermined by numerous leaks.

Competing oils

Millions of dollars of foreign investment would be needed to restore the infrastructure. In the opinion of experts, this will only come with a reform of the law on hydrocarbons, the guarantee of legal security for private companies that have been burned by expropriations in the past, as well as the lifting of American sanctions to be able to export.

Luis Vicente Leon, an economist and political analyst, believes that it is possible to proceed, if not to a total lifting of sanctions, at least to a "flexibilisation".

"We are going to see negotiations for the granting of oil production licences within the framework of the sanctions," he predicts.

The interest of the United States, Mr Leon continued, is that Venezuela increases its production and helps stabilise the price of crude on the international market. The rise in the price of oil in recent days is pushing up the price of gasoline on the domestic market, and Washington wants to avoid this at all costs.

According to Mr Leon, the United States would like to see Venezuela resume exports to the countries of the Gulf of Mexico, which have turned to Russian crude with the sanctions against Caracas.

Washington would also like Caracas to give up its sales to China but especially on the black market where it operates with Moscow's support.

Venezuela "can compensate, in the medium term, for part of the Russian absence on the market", says Mr Leon, who points out that with the sanctions, Russian and Venezuelan oil will be competitors since they will have to sell on the same market outside the Western circuit.

Leon also believes that the US offer is fragile. The sending of the US delegation, which led to the resumption of talks with the opposition and the release of two imprisoned Americans (in Venezuela), has been criticised by a section of the US political world and not only by the Republicans.

"The Biden administration's effort to unite the world against a murderous tyrant in Moscow is commendable, but it should not be undermined by supporting a dictator under investigation for crimes against humanity in Caracas," said influential Democratic Senator Bob Menendez.

MamP's

© Photo Credits : Encyclopédie de l'énergie

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