Venezuelan oil industry: World’s largest reserves, decaying infrastructure

CARACAS – The United States on Jan 3 attacked Venezuela and deposed its long-serving President Nicolas Maduro, President Donald Trump said, in Washington’s most direct intervention in Latin America since the 1989 invasion of Panama.

Here are some key facts about the oil industry of Venezuela, whose President Maduro was

captured by US forces on Jan 3,

according to Mr Trump.

Reserves

Venezuela has the world’s largest oil reserves, but its crude output remains at a fraction of capacity due to mismanagement, lack of investment and sanctions, official data shows.

Venezuela holds about 17 per cent of global reserves or 303 billion barrels, ahead of OPEC leader Saudi Arabia, according to the London-based Energy Institute.

Its reserves are made up mostly of heavy oil in Orinoco in central Venezuela, making its crude expensive to produce, but technically relatively simple, according to the US government’s energy department.

Production

Venezuela was a founding member of the Organisation of the Petroleum Exporting Countries (OPEC) with Iran, Iraq, Kuwait and Saudi Arabia, Venezuela and was producing as much as 3.5 million barrels per day (bpd) in the 1970s, which at the time represented over 7 per cent of global oil output.

Production fell below 2 million bpd during 2010s and averaged some 1.1 million bpd in 2025.

“If developments ultimately lead to a genuine regime change, this could even result in more oil on the market over time. However, it will take time for production to recover fully,” said Mr Arne Lohmann Rasmussen from Global Risk Management.

If regime change is successful, Venezuela’s exports could grow as sanctions are lifted and foreign investment returns, said MST Marquee analyst Saul Kavonic.

“History shows that forced regime change rarely stabilises oil supply quickly, with Libya and Iraq offering clear and sobering precedents,” said Mr Jorge Leon, head of geopolitical analysis at Rystad Energy.

Joint ventures

Venezuela nationalised its oil industry in the 1970s, creating Petroleos de Venezuela S.A. (PDVSA).

During the 1990s, Venezuela took steps to open the sector to foreign investment. Following the election of Mr Hugo Chavez in 1999, Venezuela mandated majority PDVSA ownership of all oil projects.

PDVSA set up ventures in the hope of boosting production, including with Chevron, China National Petroleum Corporation, ENI, Total and Russia’s Rosneft.

Exports, refining

The United States used to be the main buyer of Venezuelan oil but since the introduction of sanctions, China has become the main destination in the last decade.

Exports have stopped since Mr Trump announced a blockade of all vessels entering or leaving the country in December 2025.

PDVSA also owns significant refining capacity outside the country, including CITGO in the United States, but creditors are battling to gain control of it through longstanding legal cases in US courts. REUTERS