The recovery follows the lifting of U.S. sanctions, which propelled exports to the Gulf Coast to 600,000 barrels per day—a volume not seen since 2018. Luisa Palacios of the Center on Global Energy Policy notes that while the industry is rebounding, the June 24 earthquake, which caused an estimated $19.6 billion in damages, complicates the investment landscape. Despite the introduction of new regulations on July 7 designed to invite private-sector participation in midstream and downstream operations, skepticism lingers regarding property rights and operational transparency.

While the government’s move to set royalty rates between 15% and 35% attempts to attract capital, the state-owned PDVSA continues to face severe logistical bottlenecks. Experts suggest that without significant improvements in the rule of law, Venezuela may struggle to replicate the investment cycles seen in neighbors like Guyana or Brazil. With 303 billion barrels in proven reserves, the potential is vast, yet decades of mismanagement and political volatility remain the primary obstacles to returning to the output levels of the late 1990s.