• 4 minutes U.S. Shale Output may Start Dropping Next Year
  • 8 minutes Read: OPEC WILL KILL US SHALE
  • 12 minutes Tidal Power Closer to Commercialisation
  • 16 minutes Washington Eyes Crackdown On OPEC
  • 2 hours Why U.S. Growers Are Betting The Farm On Soybeans Amid China Trade War
  • 15 hours Trump to Make Allies Pay More to Host US Bases
  • 7 hours US-backed coup in Venezuela not so smooth
  • 17 hours BATTLE ROYAL: Law of "Supply and Demand". vs. OPEC/Saudi Oil Cartel
  • 1 day THE DEATH OF FOSSIL FUEL MARKETS
  • 1 day Solar to Become World's Largest Power Source by 2050
  • 17 hours Biomass, Ethanol No Longer Green
  • 2 days this is why Climate Friendly Agendas Tread Water
  • 2 days Boeing Faces Safety Questions After Second 737 Crash In Five Months
  • 15 hours Trump Tariffs On China Working
  • 1 day Exxon Aims For $15-a-Barrel Costs In Giant Permian Operation
  • 2 days Sounds Familiar: Netanyahu Tells Arab Citizens They’re Not Real Israelis
Why This Oil Price Rally Has A Limit

Why This Oil Price Rally Has A Limit

While oil markets are tightening…

The EIA Cuts U.S. Oil Output Projections

The EIA Cuts U.S. Oil Output Projections

For the first time in…

Iraq Steps In To Offset Falling Venezuela Oil Production

Iraq oil production

As Venezuela’s crude oil production continues to decline, a co-member from OPEC is stepping in to fill the gap, Reuters reports, citing industry and OPEC sources. This year, daily production is set to fall by at least 250,000 barrels and next year the pace of decline may accelerate, reaching 300,000 bpd. The monthly rate of decline this year has been 20,000 bpd.

As a result, Venezuela is unable to maintain its production quota under OPEC rules—and Iraq, which produces heavy oil similar to Venezuela’s grade, has increased its shipments to some key former-Venezuelan clients, including India and the United States. Heavy Canadian oil is also replacing Venezuelan crude, Reuters data has shown.

Since the start of the year, Iraq has increased its heavy crude exports to India by some 80,000 bpd, while Venezuelan shipments to India fell by 84,000 bpd. Iraq has also raised its crude oil shipments to the U.S., to 201,000 bpd more in the first ten months of the year. In the same period, Venezuelan cargoes to the U.S. fell by 90,000 bpd.

Last month, oil production in Venezuela fell to the lowest in almost three decades, and it looks like the trend will continue as state coffers empty and the recession deepens. State-owned PDVSA simply has no access to fresh funds to finance the drilling of new wells, the maintenance of existing oil fields, or the operation of oil transport infrastructure.

One OPEC source told Reuters that this trend will be good for the market as it would hasten the rebalancing. The source even suggested that the production decline in Venezuela could help keep Brent above US$60 for longer, although there are headwinds emerging for oil prices: there is growing worry that Saudi Arabia won’t be able to get everyone on board with another production cut extension.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News