ExplainerUS warships are circling Venezuela – what does this mean for the oil trade?
US military escalation and China’s condemnation have placed Venezuela – and its role in the global oil industry – back into the spotlight
Here, the Post examines how the situation has developed and Venezuela’s role in the international oil trade – a prominence that has given the conflict global scope.
How big are Venezuela’s oil reserves, and how much does it produce?
Venezuela holds the world’s largest proven crude oil reserves, estimated at around 303 billion barrels as of 2023, according to the US Energy Information Administration. This would account for 17 per cent of global reserves, with the vast majority of Venezuela’s stock located in the Orinoco Belt river basin.
However, that year it only produced 0.8 per cent of global crude, hampered by US sanctions active since 2019 on Petroleos de Venezuela SA (PDVSA) – the state company with near-monopoly status in the refining and extraction of petroleum and natural gas.
PDVSA has not published statistics for its activity since 2016, but Reuters reported in July that the firm’s crude oil and fuel exports increased by 15 per cent year on year in 2024.
What is the status of China-Venezuela relations?
Beijing’s investments in Venezuela span mineral exploration, housing, communications satellites and railway projects. However, progress has been slow in recent years as the Latin American country’s economy continues to struggle. In 2018, Venezuela joined China’s Belt and Road Initiative, a regional connectivity strategy based around infrastructure.
In 2024, China’s trade with Venezuela reached US$6.4 billion, with 52.5 per cent in year on year growth. This included US$4.8 billion in exports and US$1.6 billion in imports, according to data from Beijing’s Ministry of Foreign Affairs.