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In 2009, Venezuela was the world’s 8th largest producer of oil and the US was ranked as #3. According to the EIA, the US is currently ranked #1 and Venezuela no longer makes the Top Ten List. Simple math shows that if Venezuela stopped oil production completely, the US could almost make up their entire loss in the near future.
*Graph from Seeking Alpha
The 10 largest oil1 producers and share of total world oil production2 in 2017
| Country | Million barrels per day | Share of world total |
| United States | 14.46 | 15% |
| Saudi Arabia | 12.08 | 13% |
| Russia | 11.18 | 12% |
| Canada | 4.87 | 5% |
| Iran | 4.67 | 5% |
| Iraq | 4.48 | 5% |
| China | 4.45 | 5% |
| United Arab Emirates | 3.71 | 4% |
| Brazil | 3.29 | 3% |
| Kuwait | 2.93 | 3% |
| Total top 10 | 66.12 | 69% |
| World total | 95.36 |
*Graph from EIA https://www.eia.gov/tools/faqs/faq.php?id=709&t=6
According to the EIA projections, the US will increase their million b/d by 1.23 during 2019.
In Nov of 2017, US produced 10.07 million b/d. The EIA projects that in 2019 this will increases to 11.3 million b/d, equating to an additional 1.23 million b/d. In January 2018, Venezuela was producing 1.6 million b/d. Therefore, Venezuela could almost stop producing all together and the US would make up for their lost production by the end of next year.
It is no secret that Venezuela has one of the greatest oil reserves on the planet and their potential for production increases is significant. However, with the country’s grave path that their government has chosen, OPEC knows that a successful turnaround in the near future does not seem eminent.
One issue to not overlook though is that there are different types of oil, so the raw numbers don’t tell the whole story. Venezuela’s declining production likely will not be offset with the same type of oil in the US. With this in mind and the new sanctions overseas, I will not be surprised if OPEC members raise output limits at their meeting next month.
The post The US Can Make Up Venezuela’s Oil Production Loss, But OPEC May Still Raise Output Limits appeared first on Catalyst Hedged Commodity Strategy Fund Blog.
