Venezuela’s leader Nicolás Maduro is keen on reactivating his oil sector due to its impacts on the economic and social impacts across the OPEC country, according to Theodore Kahn, associate director of global risk consultancy Control Risks.

Control Risks’ Bogotá-based team
Control Risks’ Bogotá-based team during a May 23, 2023 webinar about Venezuela’s opportunities and challenges. From top left to right and top to bottom: Ani De la Quintana (associate director), Lina Delgado (director), Theodore Kahn (associate director) and Edward Dean (principal). (Source: Pietro D. Pitts)

Maduro has made the reactivation of the oil sector a political imperative, Kahn said during a May 22 webinar, even though the disputed leader is in a strong political position.

“The precarious economic situation and its social impact really represent the main threat to Maduro's strong political position,” Kahn said.

“And given the economy's dependence on oil, reactivating the oil sector is really essential to reestablishing price stability and for the government to being able to provide the resources it needs to improve living standards for the majority of the population, especially in the context of de facto dollarization, which is almost certainly not going away,” Kahn said.

Venezuela’s oil production has been fluctuating between 650,000 bbl/d to 750,000 bbl/d and over the next two years the bulk of the sanctions regime will likely remain in place even amid additional loosening or licenses, Kahn said.

Status quo power dynamics after 2024

Maduro’s regime is expected to retain unrivaled power in the aftermath of elections in 2024, while the opposition is expected to be relegated to symbolic positions, according to Kahn, part of the consultancy’s Bogotá, Colombia-based team.

That’s according to Control Risks’ mostly likely scenario through 2025.


Commentary: US Crude Sanctions On Venezuela: Past, Present and Future

Kahn has concluded that the hardline faction led by Venezuelan lawmaker Diosdado Cabello and military and intelligence services will remain influential; Maduro’s government would continue to tap foreign investors; and U.S. sanctions would be a mainstay — but with expanded activity from international oil companies such as Chevron Corp.