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Venezuela’s oil production in jeopardy after new blackout

Venezuela’s oil production in jeopardy after new blackout
Venezuela is once again finding itself in the dark in another massive power outage, weighing further on the South American country that is struggling to maintain its oil output and oil exports amid US sanctions.

Venezuela, in dire need of its oil revenues that are withering on the vine, may be home to the world’s largest oil reserves, but the Maduro government is likely finding that fact of little consolation these days.

The most recent blackout marks the second such widespread blacking in less than a month and even reached the capital city and covering more than half of Venezuela’s 23 states, according to Time, who was citing social media outlets.

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Just two weeks ago, Venezuela suffered a catastrophic blackout that jeopardized the country’s oil production and exports, shutting down its main oil export terminal and its heavy crude processing complex in Jose. These operations affected its minority partners in the projects as well, including Chevron, Rosneft, Total, and Equinor, in what was thought to take offline as much as 450,000 bpd.

This time around, Venezuela’s oil operations once again could be further jeopardized, although the Maduro government is claiming that many areas have since had power restored.

While Maduro points the finger once again at the United States for causing the outage, the White House has denied responsibility. Tensions between the two nations are high as the United States continues to crack down on sanctions, and Venezuela’s oil exports to the United States hit zero a couple weeks ago.

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Tensions between the United States and Russia over Venezuela are also increasing, escalating over the weekend when two Russian planes with 100 troops landed in Venezuela, according to Reuters. The United States was quick to condemn what it felt was an encroachment in South America, while Russia downplayed the incident, hinting that it had routine military contracts to fulfill at the time.

This week’s blackout will no doubt impact oil production and exports further, with OPEC likely using the production loss as a win in its drive to lower global oil inventories to see higher prices.

This article was originally published on Oilprice.com

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