The country’s limited storage capacity has halted production
Venezuela has reduced oil production after a US export embargo paused shipments, leaving the country with limited storage capacity and forcing state oil company PDVSA to curb output
PDVSA initiated the cuts amid a blockade that has disrupted exports, Reuters reported. Production has fallen sharply in recent months: Venezuela produced around 1.1 million barrels per day in November 2025, compared with nearly 500,000 barrels per day in December 2025 following US action.
The production cuts are adding strain to Venezuela’s interim government, which is trying to maintain control after President Nicolás Maduro and his wife, first lady Cilia Flores, were captured by US forces.
PDVSA has asked its joint ventures, including those with China National Petroleum Corporation and Chevron, to reduce output amid rising onshore inventories and a shortage of diluents needed to blend Venezuela’s heavy crude. Chevron, however, holds a special licence from Washington and can continue moving cargo, while other shipments have been halted by sanctions. Two Venezuelan oil cargoes have also been seized by the US.
Venezuela’s interim president and oil minister, Delcy Rodríguez, said last month that production and exports would continue despite US measures. However, PDVSA has slowed deliveries and, since late December 2025, has increasingly relied on vessels to store crude.
With onshore storage nearing capacity, PDVSA has been using tankers as floating storage for crude and fuel, leaving more than 17 million barrels waiting offshore, Reuters reported.
Despite the disruption, US President Donald Trump has made bold claims about Venezuela’s oil future. At a news conference on January 3, 2026, Trump said: “We’re going to have our very large US oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken oil infrastructure and start making money for the country.”
Trump has since declared that Venezuela will provide the US government with between 30 and 50 million barrels of crude, estimated to be worth around £2.1bn. He has also claimed American operations could be “up and running in less than 18 months”, according to Sky News.
However, the US blockage on Venezuelan oil exports has effectively halted production, raising questions over where such volumes would come from. Data from Kpler shows almost 40 million barrels of oil are currently in storage, around half of which is held on offshore vessels.
Experts told Sky News that even if the blockade were lifted, an 18-month timeline to restart the industry is unrealistic given the condition of Venezuela’s oil infrastructure, which has been hit by years of underinvestment and corruption. Rystad Energy told Sky News it could take five to seven years for production to reach two million barrels a day, at a cost of at least £80bn.
Speaking to Sky News, Clay Seigle, senior fellow at the Centre for Strategic and International Studies, said: “The main thing to do is to build very expensive, sophisticated upgrading units.” He added that Venezuela has four such units to make its heavy crude export-ready, but currently only one is functioning, built and operated by Chevron.
