Venezuela currently produces <1% of global oil supply due to US sanctions and a naval blockade, but holds ~17% of the world’s proven crude reserves , creating medium-term supply optionality.Markets are pricing in the possibility of future Venezuelan barrels even as analysts warn of a global crude glut. Brent is already down ~20% in 2025, with positioning extremely bearish record shorts in Brent and historically low long positions in WTI.Short-term fundamentals remain negative for supply, Venezuela’s exports have already halved, sanctions and the blockade remain, and PDVSA a state-owned oil and gas company of Venezuela has asked some JV partners to cut output. Analysts estimate 2,00,000-3,00,000 bpd already shut in, with risks of further declines due to shortages of blending feedstocks for heavy crude.
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