Venezuela’s oil industry faces uncertainty after a recent political shock. Despite holding the world’s largest proven oil reserves, production remains low. Structural damage and sanctions have crippled the industry. Recovery will be slow, with a potential short-term boost if sanctions ease. Chevron maintains a foothold, while ConocoPhillips seeks compensation for seized assets.

The collapse of Venezuela’s oil industry began with expropriations in 2007, leading to a decline in production due to mismanagement and infrastructure deterioration. U.S. sanctions in 2019 further disrupted exports, with tanker movements nearly halting. Rebuilding the industry will be a multi-year effort, depending on sanctions relief and stability.

Venezuela’s oil production could rebound faster if sanctions ease, allowing shut-in wells to restart and joint ventures to resume operations. Chevron, with continuous operations in Venezuela, could scale quickly if sanctions are lifted. ConocoPhillips, on the other hand, faces challenges in re-entering the country and rebuilding from scratch.

The future of Venezuela’s oil sector hinges on sanctions relief and geopolitical factors. Structural damage will take years to repair, while short-term recovery depends on easing restrictions. Long-term recovery requires political stability, credible contracts, and significant investment. The key variable for Venezuela’s immediate oil future is the changing sanctions landscape.

Read more at Yahoo Finance: Why Sanctions Relief Alone Won’t Fix Venezuela’s Oil Industry