Analysts maintain that Venezuelan oil will continue to be in high demand by the United States despite the current policy of sanctions and whoever wins the presidential elections in that country. Leonardo Buniak considers that there will be no major restrictions on Venezuelan crude oil exports, while Luis Vicente León presents the scenarios that could arise in the country in 2025, among them, the normalization of the crisis
Venezuela continues to have an oil economy because it is a mono-producing nation and although it exports only 900 thousand barrels per day (b/d). Analysts maintain that despite the current sanctions scenario, the country became the third supplier of crude oil to the United States and will close 2024 with oil revenues of 20 billion dollars. They highlight that the controversial events in the world energy market could benefit Venezuelan oil and will be in the sights, for the better, of any of the candidates who win the North American presidential elections.
On the other hand, the new government that begins next January 10 will be a key date for the future of Venezuela, say the experts who participated in the «Business Forum: Contrasting Visions»organized by the Civil Association for Business Development (Acid) this Tuesday, October 29. At the event, several political scenarios that could occur in 2025 and the economic prospects that await them were shown.
Economist and risk rater Leonardo Buniak, director of the consulting firm Global Map, stated that “Venezuelan oil rules” since it will continue to be important for the US market, and He does not expect new sanctions to be imposed against the country’s crude oil sales. He said that currently there are 16 new approved licenses and 50 licenses that are in the process of authorization by the Office of Foreign Assets Control (OFAC).
«Venezuela is today the third supplier of crude oil to the United States and it is not the second because it does not produce more. The United States stopped buying oil from the Middle East and this is being taken advantage of by Venezuela. Whoever wins the North American elections in November will have to face great challenges that the geopolitical and energy market already shows,” he said.
It highlights that the international companies Chevron, Repsol, Eni and Maurel & Prom will continue their operations in the country because there is little oil reservoir in the alternative world to the Persian Gulf, the Caspian Sea and North Africa that has sufficient capacity and is not involved in geopolitical conflicts. “Other conflicts are expected that will affect the energy corridors and put Venezuela and its enormous crude oil reservoir at the epicenter of the panorama.”
Buniak indicated that the importance of Venezuelan crude oil is observed when oil revenues went from $5,000 million in 2015 to $20,000 million in 2024, due to the increase in the price of a barrel, the Chevron effect and the lifting of the ban on the direct sale of crude oil. nation’s oil in the international market. «Venezuela will be receiving 8 billion dollars more this year than in 2023 and that indicates that if the approval process for new licenses occurs, the country’s production will exceed one million barrels per day. “Chevron is expected to drill 30 new wells next year, while Maurel & Prom is in the process of drilling for oil and gas.”
He considers it “unlikely” that the licenses granted to date will be revoked because it will deprive the “energy security of the United States,” and that is why authorizations for foreign companies operating in the national business continue. “Economic interests today are above political ones.”
The scenarios
The recovery of the oil sector has given a boost to the Venezuelan economy, which according to estimates by the director of Datanalisis, Luis Vicente León, will end 2025 with a rate of 4.8%. Among the main growth projections, the sector stands out automotive with 12%, food with 7%, mining with 6%, construction with 5.5% and services with 4.5%.
“In the last four years we have seen a process of lifting sanctions that has generated an expansion of the oil sector, openness and a less hostile environment for business,” he stated.
León recalled that the Venezuelan economy, starting in 2014, experienced a strong contraction in its Gross Domestic Product (GDP), registering a fall equivalent to 74.32% compared to 2013. That is why, despite the recovery of last three years, Venezuela’s per capita income level is the second lowest in Latin America.
According to the study presented by the economist at the Acide forum, only 12.2% of the population (3.2 million inhabitants) has high consumption potential, while 54.1% has moderate consumption potential (14, 2 million people) and 33.7% (8.8 million) with limited consumption potential.
“It is observed that by 2024, there is a shift of consumers towards intermediate levels, few excluded have opportunities and emerging ones are established.”
He also highlighted that the average family income went from $600.3 per month in May 2023 to $826.2 in April 2024; while the family food basket went from $388 to $410.4. “The average family income grew by 37%, although it did not grow in this same proportion for all levels.” In this sense, he indicated that 33.7% of the population has an average income of $287.9 (low excluded) and 29% show an income of $445, low with opportunities).
Regarding the political scenarios, León highlighted that the conflict over the results of the presidential election on July 28 prevents him from fulfilling his mission of elucidating the reason between the government’s search for legitimacy and recognition and the validation of the desire for change represented by the opposition.
It then foresees several scenarios: in the case of intentional radicalization that comes from this same 2024 and unilateral liberalization, a “Nicaraguaization of the country, an Iranianization or an implosion or peaceful transition.” «The most important uncertainty in the permanence of Maduro’s power is not around whether he is sworn in or not, but in how he is sworn in: Around a strategy that allows him to reduce international tensions, even without recognition or by pushing the international community to a policy of maximum pressure.
For its part, in a scenario of a change of government, it is considered a “black swan” because its probabilities are not high.
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