Merryn Talks Money Venezuela’s Oil Reserves Versus Reality: Why Output Can’t Jump Overnight
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Jan 12, 2026 Michael Haigh, Managing Director of Fixed Income and Commodities Research at Societe Generale, dives into the complexities of Venezuela's oil reserves and their impact on global markets. He explains why political actions won't result in immediate oil output increases and highlights the influential role of OPEC and China in price dynamics. The discussion also explores copper's bullish potential driven by electrification and AI, while gold and silver remain attractive due to central bank demand, though risks loom if buying slows.
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Venezuela's Reserves Are Not Straightforward
- Venezuela's 303 billion barrel figure is price-dependent and overstates proven reserves today.
- Much of its oil is extra-heavy and harder and costlier to extract and refine.
Venezuela's Oil Needs External Diluent
- Extra-heavy Venezuelan crude needs diluent like naphtha to flow and to refine.
- That dependency creates strategic ties with suppliers of condensate, notably Russia, China, and historically the US.
Expect A Multi-Year Ramp-Up
- Don't expect Venezuela to boost global barrels overnight; rebuilding to 2–3mbd takes years.
- Plan timelines of five to ten years for durable production increases, not 18 months.