US Nears Venezuela Oil Deal as Rystad Forecasts Slow, Heavy-Crude-Dominated Recovery
Washington is finalizing a long-term field access agreement with Caracas, but Rystad projects only 194,000 bpd of additional Venezuelan output by 2028, almost all from Orinoco heavy crude.
Washington moved closer to formalizing long-term access to Venezuelan crude fields on Thursday (2026-08-27). Sources told Reuters that the Trump administration was negotiating a deal structured around a lease model, with individual field allocations to be determined through a subsequent auction or tender among U.S. producers.5,7
Reuters reported the talks as occurring at the highest levels of both governments as of Friday (2026-08-28).7 The Strategic Petroleum Reserve, currently holding about 290 million barrels in underground salt caverns (roughly 41% of its total capacity), provides one obvious destination for discounted Venezuelan barrels, alongside U.S. refineries built around heavy crude feedstocks.7
But Rystad Energy's production numbers put a firm ceiling on the pace. The consultancy estimates Venezuelan crude output could rise by around 17%, or approximately 194,000 bpd, between the fourth quarter of 2025 and the fourth quarter of 2028. Three years of work to add less than 200,000 bpd.3
The grade breakdown defines the challenge. Around three-quarters of Venezuela's production through 2028 is expected to come from heavy, extra-heavy crude and bitumen, with the Orinoco Oil Belt responsible for roughly 60% of total volumes, according to Rystad. Venezuela holds roughly 303 billion barrels of proven reserves, about 17% of the global total, but the bulk sits in Orinoco formations requiring upgrading infrastructure and blending agents before they can move to market.3,4
Output in July stood at 1.21 million bpd according to ministry data, less than half the more than 2.5 million bpd recorded a decade ago. PDVSA and its foreign partners added 20,000 bpd that month — progress, but against a steep historical deficit.6,4
Chevron is outpacing the broader sector. Across its three joint ventures with PDVSA, the company reported output climbing 12% year on year to 280,000 bpd over the past six months.4 Chevron expects to boost its share, 240,000 bpd produced jointly with PDVSA, by half within two years, adding roughly 120,000 bpd to that combined figure.1 That single company's expansion plan accounts for most of Rystad's projected national gain through 2028.
The economics of extra-heavy Orinoco crude set a price floor for investment. Venezuela's flagship new projects are not considered bankable below $80 a barrel, and production from them would not begin until at least the late 2030s.2 ICE Brent crude front-month was at $90.78 on Monday (2026-08-31), leaving some margin above that threshold, but investors evaluating long-cycle Orinoco commitments must weigh a decade of supply growth from competing basins before first production arrives.
China is unlikely to compete aggressively for Venezuelan barrels. Venezuelan crude made up less than 4% of China's imports in 2025, and Beijing held roughly 1.2 billion barrels in strategic storage, equivalent to about 110 days of import cover, while domestic consumption growth was slowing.2 Beijing can redirect purchases without acute pressure, limiting Caracas's leverage in any bidding contest.
Reports emerged on Friday (2026-08-28) that Venezuela's possible exit from OPEC was being discussed in the context of its U.S. negotiations, though Caracas had taken no final decision.6 A departure would carry symbolic weight given Venezuela's founding-member status, but its current output of 1.21 million bpd carries limited influence over group supply discipline compared with the UAE, which produced around 3.4 million bpd in 2025 with effective capacity of roughly 4.2 million bpd.6 Whether the lease deal survives legal challenges from Citgo creditors and Venezuela's defaulted sovereign debt holders may be what most shapes how much of Rystad's 194,000 bpd forecast reaches the market before 2029.1,7