RVers hoping that recent political shifts in Venezuela will deliver cheaper fuel for their travels should temper their expectations, according to a University of Connecticut economist.
Venezuela holds the largest proven oil reserves in the world, but its current oil output is tiny, less than 1% of global production—far too small to move markets in the near term, said Erik Katovich, assistant professor of agricultural and resource economics.
Immediate price relief unlikely
Despite headlines touting efforts to increase Venezuelan oil exports under current U.S. control of the country’s energy sector, significant price relief at the pump is unlikely for many years, if ever, experts say.
Venezuela’s petroleum infrastructure has suffered decades of underinvestment, sanctions and mismanagement. Restoring production and export capacity, including transportation, storage, and refining systems, would require tens of billions of dollars and years of investment before output climbs meaningfully above current levels.
Even with optimistic projections, Katovich said Venezuela might only modestly increase production, perhaps by a few hundred thousand barrels per day in the next year. A much larger meaningful rise to several million barrels per day could take five to 10 years or more, and would still face economic and logistical hurdles.
What this means for RVers
That’s important for all U.S. motorists, including RVers, because U.S. gasoline prices are closely tied to global crude markets. A relatively small bump in Venezuelan crude is unlikely to dislodge established supply chains or significantly push down pump prices, analysts have told other news outlets.
Venezuelan oil also tends to be heavy crude, which requires special refining capacity that many U.S. facilities aren’t optimized to handle without long-term contracts or upgrades.
For travelers budgeting long road trips this year and beyond, that means fuel costs are more likely to be shaped by broader global energy supply and demand trends and not by immediate shifts in Venezuelan production.
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RVT1246b
I really enjoyed this article and overall it is very accurate but I would note that oil refineries in Corpus Christi and Houston were specifically built for the refining of Venezuelan crude pre Hugo Chavez.
Tough to say what this crude does to the market long term but IMHO, it is good to get this crude off the black market for a 30% discount to China, for refining and domestic use or even to Russia where it then works its way back into the global market at market price with Putin making the 30% profit as a middle man. Just sayin.
😎✌️
I have conflicted feelings with this one. I have no kind words for Maduro but what we’re doing doesn’t feel right.
Some might swear it’s the right thing to do but as the tragedies in Minneapolis have shown, doing the right things wrong helps nothing. And of course, doing the wrong things right is just a more efficient way to fail.
Many Americans have never heard of BRICS but even Canada is starting to question their place in the US hegemony.
If Carney adds a second “C” to BRICS, do we declare him a threat to our national security, indict him for Fentanyl crossing over and assume control over the oil sands of Fort McMurray? It sounds crazy but we kinda did that to Venezuela….
I’m not sure even Carney is dumb enough to join BRICS. The one thing the BRICS nation’s have common is communism and quasi socialism so they are a prime candidate but I think you would see independent minded provinces like Alberta and Saskatchewan jump off that crashing train, which Carney is driving.
Minneapolis…. very messy but that is on Minneapolis and MN. Only 2% of deportations are in MN. One only has to ask, why is this not happening for the other 98% of deportations?
Happy trails Vince.✌️😎
I hear ya CP. Safe travels amigo!
Thank you, RV Travel, for sharing this information. My knowledge of Venezuela and its oil fields is severely dated (last updated almost a decade ago prior to retirement), so take this for what you think it is worth. After all the knowledgeable PdVSA employees were sacked in the late 1990s and 2000s, their replacements were ill-trained or untrained, and lots of inappropriate liquids were reinjected into the mature oil deposits to attempt to maintain pressure within the reservoirs and attempt to slow natural production rate declines. The modest claims of the article seem extremely optimistic. Have a great day and safe travels!
America has no right to just kill people for alleged drugs without proof and trial. When in reality all our president was after their oil. As Americans we wouldn’t like it to happen to us and with the wack jobs in the world. It could happen to us.
It did happen to us, 25 years ago. In the case of Maduro, he had already been indicted in the Southern District of New York years ago, so effectively he was little more than a wanted Narco Trafficker. This is almost identical to the Manuel Noriega capture and prosecution 6 presidents ago. The only difference is in Panama we were on the ground for almost 2 weeks, in Venezuela we were on the ground for less than an hour and ‘in country’ for less than 4 hours.
Good topic tho. Happy trails. 😎✌️
Not so sure it was only about the oil…
Of course, current production reflects a decade or more of horrid mismanagement, so if they can open up to run their industry competently, production could quickly expand many-fold.
Communist China won’t get discounted oil. Cuba will get no oil. No oil means Cuba’s Communist dictators will lack fuel to send troops to squash rebellions to overthrow their evil dictators. With our long standing Monroe Doctrine, there should be no Communist dictatorships in the Western Hemisphere.
Venezuela was once a very prosperous nation and now has be given the chance to be prosperous again. President Trump just busted up OPEC of which Venezuela was a founder.
Low world oil prices also hurt Iran and Putin, making it hard to raise hell against Ukraine, etc. Pray that our enemies are defeated.