Venezuela has seen its oil production decline despite having the largest reserves in the world, due to mismanagement, lack of maintenance and US sanctions. The United States had relaxed sanctions on President Nicolás Maduro six months ago, following his announcement of plans for free presidential elections. However, an agreement reached between Maduro and the US-backed opposition in Barbados for upcoming elections turned out to be empty as key opposition figures were barred from running.
Following the easing of sanctions, American oil company Chevron returned to Venezuela and a group of Americans held in the country were released. Major companies like Shell and Repsol have engaged in deals with Maduro’s government and the state oil company PDVSA, despite the challenges faced by Venezuela’s oil sector. Ten years ago, Venezuela produced 2.9 million barrels of oil per day, but as of 2020, production had dropped to 400,000 barrels per day. With the reintroduction of sanctions on Venezuela’s oil sector by the US government, production has seen a slight increase to 800,000 barrels per day in the first quarter of this year. The deal between Chevron and PDVSA remains untouched for now.
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