Switched On Where Venezuela’s Oil Fits in the Global Market: React
Jan 9, 2026
In this captivating discussion, David Doherty, head of natural resources research at BloombergNEF, unpacks the complexities of Venezuela's oil market. He examines the challenges of higher production costs and political risks that could hinder the country's oil output. While there’s potential for increased global supply, he highlights the heavy crude demand from refineries. Additionally, David speculates on how shifting trade flows might impact pipelines and the US oil market, revealing the intricate dance between geopolitics and commodity economics.
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Instant Big Supply Is Unrealistic
- If Venezuelan production could ramp instantly, supply could rise by about 2 million barrels per day, mostly heavy crude.
- David Doherty says that immediate large-scale ramp-up is virtually impossible and unrealistic.
Market Glut Lessens Venezuela's Impact
- The global oil market already sits in surplus, so extra Venezuelan barrels would further pressure prices.
- Venezuelan oil's heavy grade fits refinery demand, but volume alone doesn't mean the market needs more crude.
Heavy Oil Can Increase Refinery Margins
- Heavy, sour crude can be profitable for complex refineries because they buy cheaper feedstock and make similar high-value products.
- Complex refineries convert cheaper heavy oil into gasoline and jet fuel to increase margins.