Venezuelan President Nicolas Maduro is facing long-term pressures on a main source of revenue -- crude oil -- a country profile reads. File Photo by Cristian Hernandez/EPA-EFE
June 22 (UPI) -- Long-term pressures on the oil sector in Venezuela won't be resolved anytime soon, so production woes are expected to continue, a U.S. energy report found.
Lingering production declines from Venezuela are supporting higher oil prices. The price for Brent crude oil, the global benchmark, is up nearly 70 percent from this time last year.
A country report from the U.S. Energy Information Administration said the Venezuelan oil industry has been mismanaged for decades. More recently, some of the workers at state-run oil company Petroleos de Venezuela, or PDVSA, have been jailed on corruption charges.
"This has caused a near-complete paralysis at the company," EIA's report read.
Venezuela is a member of OPEC. Ministers meeting in Vienna on Friday are considering ways to offset the chronic problems from one of its founding members. OPEC is halfway through its second year of an agreement to drain a surplus on the oil market and over-compliance with the agreement is attributed in part to the loss of Venezuelan barrels.
For the Venezuelan economy, oil revenue was $22 billion last year, compared with about $70 billion in 2011. Total Venezuelan exports are 10 percent lower than 2016 levels.
Secondary sources reporting to economists at the Organization of Petroleum Exporting Countries said Venezuela production averaged 1.39 million barrels of oil per day last month, almost 10 percent lower than the first quarter average.
"The Venezuela's oil industry's chronic problems that led to the steep production declines are unlikely to change any time soon," EIA's report read.
PDVSA woes have spilled over into a lack of confidence from its trading partners. Venezuela is one of the main oil exporters to the United States. Venezuelan exports to the United States averaged 480,000 barrels per day in March, down from about 840,000 barrels per day in December 2015.
The Arab Petroleum Investments Corp., a regional investment bank, reported last week the main concern about the OPEC effort has been outside the Middle East and North African region, primarily Venezuela.