Venezuela Starts Cutting Oil Production Amid U.S. Blockade

Group 1 - Venezuela has started shutting down wells that produce extra-heavy crude in the Orinoco Belt due to the U.S. blockade affecting shipments and storage capacity [1][3] - PDVSA plans to reduce total oil production by about 15%, translating to a cut of 25% in Orinoco Belt output, bringing it down to approximately 500,000 barrels per day (bpd) [2] - The initial wells to be shut down are those in the Orinoco Belt and Junin, with additional wells in the Ayacucho and Carabobo regions to follow [2] Group 2 - The U.S. blockade is limiting Venezuela's trade routes for shipping crude to China, leading to overflowing storage and inventory issues [3] - Chevron continues to export Venezuelan crude to the U.S. under a special license, despite the overall squeeze on PDVSA's export capabilities [4] - Chevron's Venezuelan output is primarily sent to U.S. Gulf Coast refineries that process heavy sour crude, which is crucial for complex refiners facing supply constraints from other producers [5]