Although Venezuela has enormous oil reserves, it will take years before this oil reaches the market. This will also require massive investments, estimated at between 50 and 110 billion dollars. The question is which oil companies are willing to take on this risk, says Hans van Cleef.
In the short term, Van Cleef sees Venezuela’s oil exports possibly increasing by 100,000 to 200,000 barrels per day, but this is only a drop in the ocean. Global oil production exceeds 100 million barrels per day.
Oil prices are still hovering around 60 dollars per barrel, and according to Van Cleef the “Venezuela effect” is therefore limited.
According to the analyst, oil prices should also not expect support from OPEC. The cartel has recently reiterated that supply and demand are “relatively balanced,” meaning production will remain stable.
Possible intervention in Iran or stricter sanctions on Russia could still affect oil prices, Van Cleef suggests, but “oil has been in a downward trend for some time.” While he expects this trend to continue for a while, he believes the end of the downturn is approaching, pointing to the costs of oil production.