U.S. sanctions, political troubles and repeated power blackouts pushed Venezuela’s crude production to a long-term low of 870,000 barrels per day (bpd) in March, the International Energy Agency (IEA) said in its latest report, even lower than OPEC reported the day before.
“The blackouts are an additional challenge for Venezuela’s oil sector, already set back by economic collapse, corruption, mismanagement and – more recently – by U.S. sanctions,” the Paris-based IEA said in its monthly report, Reuters reported.
The IEA said the output decline of 270,000 bpd was Venezuela’s second largest month-on-month drop and put the country’s production at 600,000 bpd less than a year earlier.
Venezuela told the Organization of the Petroleum Exporting Countries that the nation pumped 960,000 bpd last month, a drop of almost 500,000 bpd from February, OPEC said on Wednesday.
Further, Indian imports of oil from Venezuela have fallen to their lowest levels in over half a decade, shipping and industry data showed, as a severe economic and political crisis hit crude output in the South American OPEC member.
Venezuela’s oil production has plunged to its lowest in decades, with the country racked by quadruple-digit inflation, a lack of hard currency and a crippling recession.
The five-year average of Venezuelan crude oil to India was around 440,000 bpd, the shipping and industry data showed. It is estimated the Venezuelan imports will fall much lower than 200,000 bpd.
India’s oil supplies continue to be dominated by West Asian members from the Organization of Petroleum Exporting Countries (OPEC), with Iraq and Saudi Arabia prominent.
Venezuela’s drop-off in shipments to India are also on account of supply obligations to other countries which, amid its overall declining output, leave fewer cargoes available for sale elsewhere. Venezuela is obliged to supply barrels to China and Russia to pay back debts, so not too much is left for others, mainly India.
Venezuelan oil shipments to India surged from May, 2012, when supplies from Iran hit insurance and banking hurdles caused by western sanctions against Tehran’s nuclear programme.