OPEC+ has held to its plan to pause supply increases in the March quarter, with markets already bracing for a surplus and the group waiting to see whether the surprise US capture of Venezuelan leader Nicolas Maduro will disrupt output.
Saudi Arabia, Russia and other key members agreed on Sunday to keep production steady through the end of March, reaffirming a decision first taken in November to halt last year’s rapid increases. Delegates said Venezuela was not discussed during the 10-minute video meeting and that it was too early to judge what response might be needed.
The producer group is dealing with multiple headwinds: crude is trading near its lowest level in 4 years and many forecasts point to a potential record glut as supply remains strong and demand soft. The turmoil in Venezuela adds another layer of uncertainty to a geopolitical picture already strained by conflicts and tensions from Russia to Yemen.
PDVSA begins cutting output as storage fills and US blockade halts exports after Maduro’s capture
In Venezuela, state oil company PDVSA has begun cutting crude production as storage fills, after a US blockade reduced exports to zero. The country’s oil shipments — its main source of revenue — have effectively stalled under tanker restrictions tied to sanctions and following the seizure of two cargoes last month.
Caracas has been thrown into political crisis under an interim government after US forces arrested President Maduro and his wife on Saturday. President Donald Trump said the country was under a full “oil embargo” as part of his announcement of Maduro’s detention and a US-supervised transition.
Chevron cargoes headed to the US had continued moving under a Washington license, but shipping data showed even those shipments stopped from Thursday.
PDVSA’s output cuts include shutting oilfields or well clusters as onshore inventories rise and the company runs short of diluents needed to blend Venezuela’s heavy crude for export. Sources said PDVSA has asked joint ventures to reduce production, including China National Petroleum Corporation’s Petrolera Sinovensa and projects involving Chevron — Petropiar, Petroboscan and Petromonagas. Petromonagas, previously operated by PDVSA with Russian state-run Roszarubezhneft, is now being run solely by PDVSA.
Even though weekend US strikes did not target energy infrastructure, PDVSA is struggling to keep operations running under mounting pressure. Workers said the company is still recovering systems from a December cyberattack, while the shipping blockade and forced price discounts have further undermined operations.
The production pullback could ripple into refining and domestic fuel supply, tightening conditions at home and threatening revenue needed by the interim government to retain power and maintain stability.