Venezuela could soon begin shutting oil wells as storage capacity tightens under the U.S. tanker blockade, according to Bloomberg, citing industry sources.
Sources said Venezuela’s main oil storage hub and tankers at its ports could reach capacity within 10 days. If that happens, producers may have no choice but to curb output.
Earlier this week, Reuters reported that about 11 million barrels of Venezuelan crude remain stranded at sea following the U.S. escalation. The disruption has forced buyers to demand deeper discounts and seek changes to spot contract terms.
Crude production has already started to fall. The International Energy Agency estimated Venezuela’s oil supply at 860,000 barrels per day in November, down from 1.01 million bpd in October. Output had exceeded 1 million bpd in September, its highest level since February 2019.
Analysts expect production to decline further in December as U.S. actions intensify in Caribbean waters. Earlier this month, U.S. authorities seized a tanker carrying Venezuelan crude. Reuters later reported that Washington has identified additional vessels for possible seizure.
The blockade has also disrupted Venezuela’s access to Russian naphtha, which PDVSA uses to dilute its heavy crude for export. Last week, a tanker carrying 32,000 metric tonnes of Russian naphtha reversed course and headed back to Europe, according to LSEG data cited by Reuters.
In a worst-case scenario, Venezuela could lose as much as 500,000 barrels per day of oil output. Reuters estimates that tighter restrictions and a shortage of diluents could severely limit the country’s ability to sustain exports.