Venezuelan Oil Sector Gets a Lift

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Written by Daniel Graeber for IIR Energy Intelligence (Sugar Land, Texas)

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Summary

The U.S. Treasury Department on Wednesday made it easier for companies to do business in the Venezuelan energy sector. Meanwhile, part of a refinery idled since 2022 is coming back to life.

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U.S. Eases Sanctions

The U.S. on Wednesday eased sanctions on Venezuela to allow U.S. companies to do business there, while glimmers of optimism emerged with the resumption of operations at a facility idled for more than four years that is designed to help deliver heavy crude oil.

With U.S. President Donald Trump under pressure from the economic fallout of the war in the Middle East, the U.S. Treasury Department said state-run Petroleos de Venezuela, better known as PDVSA, could sell Venezuelan crude oil directly to U.S. companies and global importers.

The U.S. already is importing Venezuelan crude oil through Chevron Corporation, though this marks a stark reversal from regulations last year that stifled an-already delipidated energy sector.

Meanwhile, Petromonagas, a joint venture of the state oil companies of Venezuela and Russia, is in the process of resuming operations at its Venezuela Upgrader. Industrial Info sent an alert to clients this week that work was supporting the restart of a delayed coker with a capacity of 80,000 barrels per day (BBL/d). The entire facility can handle 130,000 BBL/d.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Petroleum Refining Plant Database can learn more about the Venezuela Upgrader--including capacities, investment values and necessary equipment--in a detailed plant report.

The plant is still running at reduced rates. It's not expected to be back to full capacity by 2028. Early-year operations, however, came more than four years after a fire forced operators to shut the plant down in 2022.

Industrial Info is tracking nine operational petroleum refining facilities in Venezuela. There are another 36 active petroleum refining turnarounds, revamps, rehabilitations, restarts and refurbishments in the country, worth a total of $207.5 million. Subscribers can learn more from lists of plant profiles and detailed project reports.

Venezuela sits on the world's largest proven oil reserves, estimated at more than 300 billion barrels, or roughly 17% of global reserves. It could require hundreds of billions of dollars and more than a decade of commitments to fully revive Venezuela's oil sector, but the upgrader is a start.

Oil production peaked in the 1970s at about 4 million BBL/d. Currently, about 45% of the estimated 900,000 BBL/d produced in Venezuela is Merey 16, a type of heavy, sour crude oil. Venezuelan crude is so dense it needs special processing to move it to export arteries, and upgraders like the one controlled by Petromonagas can help that.

Products dubbed diluents, which are diluting agents, can also help move Venezuelan crude and the U.S. is said to be delivering some of that as well to support reconstruction.

By the Numbers

• 191,000 BBL/d is the four-week average for U.S imports of Venezuelan crude
• 17% of the world's oil reserves are in Venezuela

A Slow Revival

Late-2025 U.S. aggression against Venezuela, ostensibly on drug trafficking concerns, culminated with the U.S. military's capture of former President Nicolas Maduro on January 3. Trump said shortly after the arrest that he would "run the country," adding that "our very large United States oil companies" will be the ones to spend the billions of dollars necessary to address chronic underinvestment and poor management.

Chevron is the only U.S. company with a license to operate in Venezuela.

Secondary sources reporting to economists at the Organization of the Petroleum Exporting Countries (OPEC) put Venezuelan oil production at 903,000 BBL/d in February, above the 823,000 BBL/d from January, but below the fourth quarter average of 943,000 BBL/d.

OPEC economists in their monthly market report for March made little mention of Venezuela, only to say that an influx of crude oil imports to the U.S. market means more high sulfur fuel oil (HSFO) could be available. HSFO is used for power generation and as shipping fuel.

It's far too early to offer a real assessment of Trump's promises for the Venezuelan oil sector. Over the four weeks to March 6, U.S. imports of Venezuelan crude oil averaged 191,000 BBL/d, compared to 203,000 BBL/d during the similar period last year.

Key Takeaways

• U.S. eases sanctions on Venezuela
• Part of a refinery idled since 2022 is coming back to life

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR News Intelligence) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 250,000 current and future projects worth $30.2 trillion (USD).