Venezuela: raising oil output will be a long journey

The reported deal that is close to being reached to lift US sanctions on Venezuela’s oil sector in return for competitive elections would help to raise the country’s oil output from very depressed levels. But the sector requires enormous investment to return output to the levels seen only a decade ago. And this wouldn’t materially affect the deficit in the global oil market in the near term. In the meantime, question marks hang over whether Venezuela’s government sticks to its side of the deal.

In view of the wider interest, we are also sending this Update to clients of our Energy service.