Venezuelan oil sector in tailspin

Venezuelan oil production hit fresh lows in July amid an escalating economic crisis that has crippled state-run company PDVSA, crude exporters group OPEC said on Wednesday.

Output for the month averaged 1.23Mb/d, down 1.8% from June, according to OPEC secondary sources. The oil-rich nation's accumulated annual average production this year is 1.54Mb/d, its lowest level since 1950.

Since 2016, Venezuelan crude output, which accounts for 95% of the country's export earnings, has fallen by more than 900,000b/d, a 42.6% decrease.

The decline coincides with the worst recession in Venezuela's history, marked by hyperinflation, severe food shortages and a mass exodus of its people.

Analysts have blamed the crisis on the failed economic policies of President Nicolás Maduro (pictured), who began a second six-year term in May following elections that were widely denounced as rigged.

"In the past 12 months the country has stopped producing 700,000b/d, which is equivalent to US$16.6bn a year," said Alejandro Grisanti, the director of Venezuelan consultancy firm Ecoanalitica, in a social media post.

"Since 2014, the country has stopped producing 1.446Mb/d, equivalent to US$34.3bn a year. With those resources, we would have a solid private sector and more schools, hospitals, etcetera."

In related news, PDVSA hopes to reopen the south dock of its José oil port later this month, according to media reports on Wednesday.

Docking facilities at the port, located in the northeastern state of Anzoátegui, were damaged last month following a tanker collision, limiting PDVSA's ability to dispatch exports.

LATIN AMERICA

Meanwhile OPEC made a downward revision to its forecast of higher oil supply among Latin American non-members this year. Production is now expected to average 5.19Mb/d, 0.07Mb/d less than the previous month's projection, but 0.05Mb/d more than the 2017 mean.

The revised forecast reflects lower expected output in Brazil, "which is the main country in the region set to witness growth this year, at 0.07Mb/d," OPEC said.

In 2019, oil supply in Latin America is forecast to grow by 0.36Mb/d, driven by Brazil, with average output at 5.55Mb/d.