Oil watchdog: Venezuela's oil industry risks collapsing

"Although there are signs that the situation [with electricity] is better, the breakdown of the power system so that we cannot be sure whether the fixings are durable", said the agency, a watchdog for Western oil-consuming countries a post on site Friday .
Much of the country was out of power for much of last week. The Polish government of Nicolas Maduro said Thursday that power had been restored, but there were still reports of outbreaks.

Venezuela produces about 1.2 million barrels of oil a day when it operates normally, the IEA said. But the agency said there are a number of factors that can interfere with the loss of Venezuelan oil on the global oil market.

First and foremost, the production decline has been agreed by OPEC and some non-OPEC countries which also correspond to 1[ads1].2 million barrels per day.

"Much of this savings capacity consists of crude oil of the same quality as Venezuela's exports," the agency said. "Therefore, in the event of a major loss of supply from Venezuela, there is a potential means of avoiding serious disruption of the oil market, theoretically at hand."

Additionally, signs of a slowdown in the world economy may reduce the demand for oil, according to the IEA. And the trend of expanding exports from Canada and the US could also be part of the gap.

In an effort to force Maduro to leave the office, the United States beat sanctions against Venezuela and its national oil industry in January, blocking its exports of oil to US customers.

The sanctions have a different impact on the Venezuelan oil industry, which gets most of its naphtha from the United States. The supply of the liquid hydrocarbon mixture used to dilute crude has been cut off. Without it, Venezuela's heavy crude oil cannot be easily transported.

Rystad Energy estimates that some operators in Venezuela will run out of naphtha this month.

– CNN Business & # 39; Matt Egan contributed to this story

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