Venezuela keeps oil production from declining even after Chevron's exit

As reported by Bloomberg, oil production in Venezuela turned out to be more resilient than expected, despite the forced departure of Chevron Corp. from the country. According to the agency, state-owned Petroleos de Venezuela maintained average oil production of about 1.1 million barrels per day in June and July.

Venezuela's crude output was expected to decline after Chevron's operations were curtailed, as the company imported much of the diluent needed to transport oil through pipelines. However, accumulated stocks of the substance are helping the country keep production near pre-existing levels—during May, Venezuela's purchases of diluent rose to the highest level in four years. All shipments came from the US.

As Francisco Monaldi of Rice University notes, it's hard to estimate now how long Venezuela's accumulated reserves will last. According to his estimates, they will start shrinking in the next two to three months.

However, the Latin American country will be forced to purchase alternatives in the summer amid US restrictions. Such alternatives include condensate from Iran and heavy naphtha from Russia.