Pins and balloonsAnother Venezuala balloon floated by short-stack but here comes the pin , you really need to do some research and get past the headlines . While Chevron has been permitted to re-enter Venezuala , all they are allowed to do is work on old established sites and limited to maintanence and repair . No new production or drilling , just rescue dying production and no revenue goes to PDVSA (Venezualan oil company) . As for Russian involvement , it will only complicate an already delicate agreement .
Venezuala's oil industry has fallen into disrepair after government nationalization robbed companies like Chevron and Exxon of their holdings followed by a decade of corruption , embezzlement and neglect . It will take years to increase production and assess how badly reserves have been damaged .
Like the phantom Iranian deal that never happened , this Venezuala non-event will give a few (like short-stack) reason to again suggest the sky is falling . US shale isn't able to resume pre-covid production , DUC inventory is 40% of last years total and drilling activity is stagnate . OPEC+ is more likely to cut production at their next meeting , since I don't see any tsunami of supply on the horizon , it basically comes right back to demand . A certain amount of demand will not be effected by a recession or slowdown , discretinary consumption is a small percentage and a reopened China will more than absorb those available barrels .