World can rely on OPEC supply cushion for urgent oil needs: IEA

PARIS (AFP) – Production cutbacks by OPEC nations are building a supply cushion that could be called upon to mitigate a possible supply shock from an abrupt drop in crisis-hit Venezuela’s output, the IEA said yesterday.

With a nationwide blackout that paralysed the country for one week, demonstrating the unreliability of the country’s electricity network, new questions are being raised about Venezuela’s ability to continue to produce and export oil.

In its latest monthly report, the Paris-based International Energy Agency said that Venezuela’s oil industry operations were seriously disrupted by the blackout and warned that “ongoing losses on a significant scale could present a challenge to the market”.

Venezuela’s oil output has long been on a downward spiral thanks to years of underinvestment and mismanagement, with stepped-up United States (US) sanctions further trimming exports.