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Photo: Jepayoa Delita/Getty Images

Things could get a lot worse before they get better for Venezuela's oil sector, according to a new analysis from the consultancy Rystad Energy. But needless to say, the political outcome there matters a lot.

What they found: In their "base" case, production falls from 1.34 million barrels per day at the end of 2018 to 1 million this year, then drops further to 890,000 barrels per day next year.

  • But, but, but: If the standoff there continues and the Maduro regime can't counter the effect of U.S. sanctions and get more money, output could slide by 20% more this year and keep falling next year.
  • In their "high case," where there's regime change that ends sanctions and brings new financing to the country's battered oil sector, the decline is less pronounced, with production falling to 1.11 million barrels per day this year and slightly further in 2020.

What's next: Even if Maduro is ousted, production will come back only gradually as sanctions are lifted and new financing comes in, Rystad projects.

  • They see output from the country's massive reserves climbing to around 1.54 million barrels per day in 2025, still well below the 2.44 million barrels per day at the start of this decade.

The big picture: So far, oil markets haven't been especially rattled by the crisis there, in part because production has been declining for years.

But, but, but: This new commentary from the Center for Strategic and International Studies warns that there could be bumpy times ahead, both for Gulf Coast refiners that rely on Venezuelan heavy crude and the market more broadly.

  • "Gulf Coast refiners are likely to be increasingly short of the heavier grade crudes and scrambling for alternative supplies, especially later this spring as maintenance season ends," author Frank Verrastro writes.
  • He says the Trump administration seems to be counting on a swift resolution to the standoff, and "the protracted loss of substantial heavy oil volumes could also complicate the next round of sanctions and waivers on Iranian oil."

The bottom line: "Add to that Venezuela’s assumption of OPEC’s presidency, planned changes in maritime fuel standards and resurgent calls for climate action, and 2019 has all the earmarks of another year of high volatility," Verrastro adds.

Go deeper

Off the Rails

Episode 2: Barbarians at the Oval

Photo illustration: Sarah Grillo/Axios. Photo: Jim Watson/AFP/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. This Axios series takes you inside the collapse of a president.

Episode 2: Trump stops buying what his professional staff are telling him, and increasingly turns to radical voices telling him what he wants to hear.

President Trump plunked down in an armchair in the White House residence, still dressed from his golf game — navy fleece, black pants, white MAGA cap. It was Saturday, Nov. 7. The networks had just called the election for Joe Biden.

Fringe right plots new attacks out of sight

Illustration: Aïda Amer/Axios

Domestic extremists are using obscure and private corners of the internet to plot new attacks ahead of Inauguration Day. Their plans are also hidden in plain sight, buried in podcasts and online video platforms.

Why it matters: Because law enforcement was caught flat-footed during last week's Capitol siege, researchers and intelligence agencies are paying more attention to online threats that could turn into real-world violence.

Kids’ screen time up 50% during pandemic

Illustration: Sarah Grillo/Axios

When the coronavirus lockdowns started in March, kidstech firm SuperAwesome found that screen time was up 50%. Nearly a year later, that percentage hasn't budged, according to new figures from the firm.

Why it matters: For most parents, pre-pandemic expectations around screen time are no longer realistic. The concern now has shifted from the number of hours in front of screens to the quality of screen time.

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