Venezuela's Oil Industry on the Mend, But Rebuilding Remains a Challenge

Despite sitting on the world's largest proven oil reserves, Venezuela remains a modest producer, producing around 1.25 million barrels per day as Western companies return and Washington encourages investment.

This represents a significant improvement from the depths of the pandemic-era crisis, when production briefly sank to 400,000 to 500,000 barrels per day, but still falls short of its former potential after decades of underinvestment, political intervention, sanctions, and infrastructure decay.

Luis Pacheco, a former senior executive at state oil company PDVSA, notes that the starting point matters: 'Any assessment of Venezuela's oil industry is relative,' he said. Compared to 2020, 'the picture is somewhat better.' However, compared to the industry before the Chávez era, it has lost production capacity and technical expertise.

Antulio Rosales, an assistant professor at York University, describes the situation as a 'deep crisis' and 'profound decay,' caused by mismanagement, corruption, and political infighting within PDVSA, combined with U.S. sanctions.