Venezuelan oil output falls 32% in June as foreign buyers cancel cargoes

CARACAS (Bloomberg) --Crude production in Venezuela tumbled for a sixth straight month in June, underscoring the dismal state of the nation’s oil industry as U.S. sanctions batter exports and the coronavirus pummels demand.

State-owned Petroleos de Venezuela SA reported a 32% decline in June output -- a reduction of almost 200,000 barrels a day compared with the previous month -- according to company and oil ministry documents seen by Bloomberg. As of June 28, production stood at 422,400 barrels a day.

Production Plunge

Venezuela, home to the world’s largest crude reserves, has struggled to rehabilitate its embattled oil industry as the Trump administration ratchets up sanctions in a bid to oust President Nicolas Maduro. At least 50 tankers known for lifting Venezuelan crude or delivering gasoline to the country have been sanctioned by the U.S., cutting off oil exports critical to bankrolling Maduro’s regime.

Foreign buyers have canceled cargoes, storage tanks have filled to capacity and PDSVA has been forced to shut wells. In May, the country had a single oil rig drilling for crude, and shipments plunged to levels not seen in 73 years.

In the period from June 1-15, the steepest production drop came from the Orinoco oil belt, where output fell by almost 50% to 148,000 barrels a day, the documents show. Production from the Maracaibo basin fell by about 40% to 83,600 barrels a day. Overall crude output hit a 74-year low on June 10, with 374,000 barrels a day supply.