Venezuela crude output falls in June to lowest since Feb 1943, OPEC data show Luc Cohen

Venezuela’s crude output fell in June to the lowest level in nearly eight decades, data the country provided to OPEC showed on Tuesday, as U.S. sanctions on state oil company Petroleos de Venezuela choke off exports.

Venezuela’s production was 393,000 barrels per day (bpd) in June, down from 573,000 bpd in May and down 52% from an average of 821,000 bpd in the first quarter of the year. That was the lowest monthly total since February 1943, when Venezuela’s nascent oil industry produced 353,000 bpd.

The drop in exports to a 77-year low of 379,000 bpd in June, spurred by escalating U.S. sanctions designed to oust socialist President Nicolas Maduro, has left onshore storage tanks almost completely full, forcing PDVSA to cut output because it would have nowhere to store crude.

Crude exports have historically provided more than 90% of Venezuela’s hard currency, though official data has not been published recently.

On July 9, there were 9 million barrels of Merey 16 crude in storage at the Jose oil terminal, and just 800,000 barrels of available space, an internal PDVSA document showed.

Neither PDVSA nor Venezuela’s oil ministry immediately responded to requests for comment.

Maduro blames the U.S. sanctions for the drop, but production has been falling sharply since 2016 - before Washington sanctioned PDVSA in January 2019 - due to under-investment and mismanagement.

There are signs the collapse is continuing. PDVSA’s Furrial division in eastern Venezuela, which produced 50,000 bpd earlier this year, produced 17,800 bpd on Sunday, according to an internal PDVSA report.

The document showed PDVSA shut more than 60 wells at several Furrial light oil fields due to “high inventories.”

PDVSA’s western division produced 97,000 barrels on Sunday, down from 200,000 bpd in March, another document showed. And for the first time since at least 1995, there were no active rigs drilling for oil in Venezuela, data from oilfield service provider Baker Hughes for June showed.