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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

Updated 4 hours ago - World

U.S. airstrike kills senior al-Qaeda leader in Syria, DOD says

A displacement camp near the village of Qah in Syria's northwestern Idlib province. Photo: Ahmad Al-Atrash/AFP via Getty Images

A U.S. airstrike in northwest Syria on Friday killed senior al-Qaeda leader Abdul Hamid al-Matar, U.S. Central Command said in a statement.

Why it matters: Syria serves as a "safe haven" for the extremist group to plan external operations, according to U.S. Army Maj. John Rigsbee.

Updated 10 hours ago - Politics & Policy

Giuliani associate Lev Parnas convicted of campaign finance crimes

Lev Parnas, a former associate of then-President Donald Trump’s personal lawyer Rudy Giuliani. Photo: Stefani Reynolds/Bloomberg via Getty Images

Florida businessman Lev Parnas was convicted Friday on charges of conspiracy to make foreign contributions to political campaigns, according to multiple outlets.

Why it matters: Prosecutors said Parnas, then an associate of former President Donald Trump's personal lawyer Rudy Giuliani, funneled over $150,000 from a Russian businessman into U.S. campaigns as part of an effort to land licenses in the U.S.'s legal cannabis industry.

Supreme Court agrees to hear challenges to Texas abortion law

Photo: Saul Loeb/AFP via Getty Images

The Supreme Court on Friday agreed to hear two cases challenging Texas' abortion law, which bans the procedure as soon as six weeks into pregnancy, but left the law in place in the meantime.

Why it matters: The court is moving extraordinarily fast on the Texas cases, compressing into just a few days a process that normally takes months. And that schedule means the court will take up Texas' ban a month before it hears another major abortion case — a challenge to Mississippi's own 2018 ban on abortions after 15 weeks.

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