Valentia Energy Partners Newsroom — Oil & Gas
Date: 02-11-2026


Venezuela Oil Recovery: Three Execution Scenarios Through Mid-2026

Current production is estimated around ~950 kb/d – 1.05 mb/d, heavily concentrated in joint ventures with foreign partners and limited by infrastructure decay, diluent shortages, and maintenance backlogs.

The question is not “Can Venezuela produce more?”
It is: How fast can capital convert into stable, exportable barrels?

Scenario 1: Controlled Incremental Recovery (Most Probable)

+150–250 kb/d by Q3 2026

What Must Happen

• General license clarity for U.S. and European operators

• Rapid mobilization of service companies (SLB, Halliburton, Baker Hughes)

• Increased diluent availability for Orinoco heavy crude upgrading

• Targeted well reactivation rather than greenfield drilling

Execution Reality

This is primarily a brownfield optimization play:

• Workovers

• Pump replacements

• Pipeline repairs

• Flow assurance improvements

These barrels are achievable without full structural overhaul.

Trade Flow Impact

• Incremental heavy-sour exports to US Gulf Coast refiners

• Potential reduction in Mexican Maya or Canadian heavy imports

• Moderate tightening in heavy-light differentials

Freight Implication

• Increased Caribbean and USGC ton-mile demand

• Aframax and Suezmax liftings likely increase first

Scenario 2: Accelerated Political Breakthrough (Bull Case)

+350–500 kb/d by Q4 2026

What Must Happen

• Long-term contractual stability guarantees

• Revenue repatriation clarity

• Capital inflows exceeding $5–7 billion

• Infrastructure rehabilitation at scale

Execution Reality

This requires:

• Upgrader maintenance programs

• Terminal modernization

• Sustained electricity and gas supply stabilization

This is capital-intensive and time-sensitive.

Trade Flow Impact

• Structural increase in Atlantic Basin heavy crude supply

• Compression in heavy crude premiums

• Possible displacement of West African medium grades in Europe

Freight Implication

• Sustained ton-mile expansion

• Potential reshuffling of West African exports toward Asia

Scenario 3: Political Friction & Operational Slippage (Bear Case)

Flat to +50 kb/d

What Derails It

• License reversals or domestic political instability

• Payment channel bottlenecks

• Insurance and compliance pullback

• Equipment import restrictions

Execution Reality

Maintenance-only survival mode.
Production remains volatile and export reliability inconsistent.

Trade Flow Impact

• Heavy-sour scarcity persists

• US refiners maintain reliance on Canada, Mexico, Colombia

• Heavy-light spreads widen

Freight Implication

• Minimal incremental ton-mile growth

• Spot volatility in Caribbean basin

What the Market Is Missing

1. Diluent is the chokepoint.
   Venezuela’s Orinoco crude requires blending or upgrading. Without stable diluent imports, production gains stall.

2. Upgraders are the bottleneck, not reserves.
   Production capacity is theoretical unless upgraders operate consistently.

3. Freight optionality is underpriced.
   Incremental Venezuelan flows reshape Atlantic Basin arbitrage before flat prices react.

4. Time lag is real.
   Capital today does not equal barrels tomorrow. The lag could be 6–12 months minimum.

Cross-Market Signals

• Heavy vs Light Spreads:
  Watch Mars, Maya, and Western Canadian Select differentials.

• Refinery Margins:
  US Gulf Coast coking refineries are the primary beneficiaries.

• Inflation Sensitivity:
  Additional heavy supply could temper diesel pricing pressure in Atlantic markets.

Strategic Overlay

Missed Opportunities (Where We Level Up Fast)

• Many desks are trading headline supply optimism instead of modeling:

  • Diluent constraints

  • Infrastructure ramp curves

  • Contractor mobilization timelines

• Heavy crude spread positioning offers cleaner exposure than outright Brent.

Strategic Implications (If Executed Well)

Procurement

Lock in phased offtake agreements tied to measurable production milestones.

Hedging

Position in:

• Heavy-light spreads

• USGC crack spreads

• Caribbean freight exposure

Trade Execution

Early movers secure:

• Storage optionality

• Freight capacity

• Blending flexibility

Late movers chase premiums.

Bottom Line

The recovery of Venezuelan oil is not a reserve story.
It is a logistics, infrastructure, and execution story.

The likely path is incremental — not explosive.

But even +200 kb/d of reliable heavy crude materially shifts Atlantic Basin refining economics.

For continued execution-level analysis on Venezuelan ramp scenarios, Atlantic Basin freight shifts, and heavy crude spread positioning, subscribe to the Valentia Energy Partners Newsroom.