Venezuela: big near-term increase in oil output unlikely

Disruption to oil production in the Middle East has turned attention to Venezuela as an alternative source of oil supply. The longer energy prices remain high, the greater the incentive for oil majors to invest in new projects. But any immediate substantial increase in oil production over the coming months looks improbable – some estimates suggest that it could take 12-18 months to raise output by just 0.3-0.5mn bpd. And over a longer horizon, it still looks highly unlikely to us that Venezuela’s oil output will return to the level seen during its heyday (of over 3.0mn bpd) for at least a decade.