The Daily Journal.- Venezuela’s oil industry showed conflicting signals in July: while production continued to expand slightly, crude exports fell sharply, according to OPEC’s monthly report and shipping data.
Secondary sources cited by OPEC placed Venezuelan production at 1.117 million barrels per day (bpd) in July, just 13,000 bpd above June’s 1.104 million bpd. The figure contrasts with the increase of about 169,000 bpd between the first and second quarters, pointing to a loss of momentum in the recovery of oil output.
However, exports showed the most significant change. According to shipping data, Kpler figures and vessel tracking cited by Bloomberg, Venezuelan crude shipments fell to 856,000 bpd in July, their lowest level in five months and 25% below June, when exports reached about 1.17 million bpd.
Shipments declined even as production continued to grow, albeit marginally. Bloomberg highlighted the significance of this divergence, noting that lower oil production alone does not explain the decline in exports.
The report identified lower Venezuelan crude flows to India as one contributing factor. The resumption of supplies from the Middle East may have reduced Indian demand for Venezuelan barrels, changing the dynamics of one of the markets that had helped sustain high export levels.
Inventories under pressure
Francisco Monaldi, an economist specializing in Venezuela’s oil industry, linked the decline in shipments to shrinking inventories accumulated by the country in previous months.
“As expected, oil exports are declining after reaching recent highs due to significant inventory drawdowns,” Monaldi wrote on X.
According to the analysis cited by the publication, Venezuela had accumulated significant crude inventories both onshore and aboard tankers during the U.S. naval blockade. Those inventories allowed the country to maintain high export levels even when its ongoing production capacity remained lower.
As those inventories shrink, shipments may now begin to reflect more directly the combination of effective production capacity and buyer demand.
July’s performance therefore marks an important shift from the first half of the year: Venezuela continues to increase its oil output, but that growth has not translated into a comparable increase in exports.
In addition, figures that Caracas reported directly to OPEC show production of 1.2 million bpd in July, up from 1.187 million in June. Although this figure exceeds the secondary-source estimate by 83,000 bpd, both measurements show the same monthly increase of 13,000 bpd.
“Developments over the coming months will help determine whether the slower pace of production growth represents a temporary pause or the beginning of a new period of stagnation for Venezuela’s oil industry,” the financial news agency explained.
With information from Bloomberg.
