Venezuela Restarts Oil Production and Exports Amid U.S.-Supervised Agreement, Signaling Industry Reactivation

The Venezuelan state oil company PDVSA has initiated the reopening of wells that were shut down during the U.S. embargo imposed in December 2025, allowing crude exports to resume after weeks of near-complete halt. On January 12 and 13, at least two supertankers departed Venezuelan waters carrying about 1.8 million barrels each, reportedly under a supply deal coordinated with the U.S. to release up to 50 million barrels of oil previously trapped by sanctions. These vessels headed north towards Caribbean storage hubs, where oil traders, refiners, and producers typically lease facilities for inventory management before final shipment.

The embargo led to a dramatic drop in daily production, falling from approximately 1.16 million barrels per day (bpd) in late November 2025 to around 880,000 bpd recently, with the critical Orinoco Belt production plunging from 675,000 bpd to 410,000 bpd. The shutdown of multiple wells and operational restrictions primarily forced by accumulated storage saturation and the inability to export crude have been key factors in this decline. During the embargo, Chevron remained the sole U.S. company licensed to export Venezuelan crude in limited quantities, maintaining minimal market presence.

Following the capture of President Nicolás Maduro by U.S. forces, Washington has implemented a new framework to manage Venezuelan oil exports, including stipulations that proceeds be channeled through U.S.-controlled accounts to ensure transparency and fund humanitarian and infrastructure projects. The agreement notably allows import of equipment, diluents, and services to address Venezuela’s deteriorated oil infrastructure, including refineries operating well below capacity. U.S. commercial firms Trafigura and Vitol recently secured licenses to market Venezuelan crude, intensifying competition for barrels in global markets.

PDVSA is concurrently conducting an internal audit following a disruptive cyberattack, aiming to align operational needs with proposed investments expected under a $100 billion reconstruction plan. While export volumes have started flowing under close U.S. oversight, full normalization depends on sustained financing, technical upgrades, and regulatory reforms. The restructuring effort also reflects U.S. interest in stabilizing Venezuela’s energy sector while monitoring revenue utilization amid ongoing political volatility.

The resumption of Venezuelan crude exports and production reactivation injects additional supply considerations into global oil markets, although capacity restoration is projected as a gradual process due to infrastructure constraints. The strategic inclusion of Venezuelan crude under U.S. supervision affects regional energy geopolitics and may influence investment dynamics in neighboring hydrocarbon provinces, including Argentina’s Vaca Muerta.