FX.co ★ Venezuela ramps up oil production as US sanctions eased

In a desperate attempt to bring oil prices down, the United States made yet another twist on the global trade arena. This time, the US managed to win over a major oil supplier who has agreed to significantly ramp up its oil exports. Interestingly, we are talking about Venezuela, home to the world's most substantial oil reserves, which has been in a long standoff with the US. A good example of international trading interests bringing political rivals together. Apparently, the White House is looking to bring more crude volumes into the market in a bid to reduce global oil prices. Production cuts introduced by OPEC+, namely by Saudi Arabia and Russia, boosted oil prices as limited supply keeps pushing the quotes higher. Against this backdrop, the US administration came up with a solution to ease the sanctions imposed on Venezuela’s oil and gas sectors. This move will allow extra oil volumes to seep into the global market. For your reference, these restrictions placed by the US date back to the era of Hugo Chávez who initiated the forced nationalization of Western companies. However, with challenges mounting on both ends, the two regimes decided to bury the hatchet and have their say in the global oil market. The new-found partnership has already borne fruit. September witnessed Venezuelan oil exports exceeding 800,000 barrels per day, marking the second-best performance in 2023. This surge hints at a revival of production in the republic, a feat accomplished by the national oil company, PDVSA, and its affiliates. Given that Venezuela boasts the world's largest proven oil reserves, the market is bracing for a significant price shift. As for the US role in this story, Venezuela hopes to get access to essential technologies for oil extraction. For the past decade, Venezuela has been unable to tap into its natural wealth. Now, with the help from the American company Chevron, which, as of last November, was granted permission by the US authorities to extract and purchase Venezuelan oil, things should go uphill for the country.