U.S. Energy Secretary: Venezuela agreement will double crude oil production, but refinery bottlenecks continue to constrain gasoline prices

(1) US Energy Secretary Wright stated that US and other international oil companies will sign an agreement in Caracas on Wednesday, which is expected to boost Venezuela’s crude oil output to more than double over the next few years. (2) Venezuela’s crude oil production exceeded 3 million barrels per day in the late 1990s, but subsequently fell sharply due to inadequate investment, poor management, and US sanctions. In recent months, production has been only about 1.1 to 1.2 million barrels per day. Wright said the investment brought by the new agreement will significantly increase supply capacity and put downward pressure on oil prices. (3) Wright also pointed out that the biggest bottleneck for current gasoline and diesel prices lies in refining capacity. Thanks to the Trump administration’s relaxation of refinery regulations, US gasoline prices are expected to fall in the coming weeks.