Will Venezuelan crude oil production reach 1.7m barrels per day in 2026?

Prediction markets put the probability at 7%: Will Venezuelan crude oil production reach 1.7m barrels per day in 2026. Currently, markets see this as unlikely (7% YES). From supply shock to oil glut: IEA flags scale of demand destruction caused by Iran war.

What’s Happening

The probability that Venezuelan crude oil production will reach 1.7 million barrels per day in 2026 remains low at 7%, as a wave of global oil supply disruptions and diplomatic shifts reshapes the market. On June 22, 2026, the U.S. Treasury Department issued a 60-day general license authorizing the production, delivery, and sale of Iranian oil, a move linked to ongoing U.S.-Iran talks. This decision sent West Texas Intermediate crude below $74 a barrel for the first time since early March, with Brent crude settling at $78.29. The license, which runs through August 21, 2026, could allow Iran to earn an estimated $2.24 billion to $3.06 billion over the waiver period, according to Newsweek. The sudden influx of Iranian supply directly competes with other producers, including Venezuela, whose aging infrastructure and political isolation have kept output far below the 1.7 million bpd target. [Yahoo Finance, Jun 22] [Newsweek, Jun 23]

The broader geopolitical context further complicates the outlook for Venezuelan crude oil production reaching 1.7 million barrels per day in 2026. The International Energy Agency (IEA) slashed its global oil demand forecast on June 17, citing demand destruction from the Iran war, and warned that a post-war supply rebound could trigger a major oil glut in 2027. Meanwhile, U.S. Vice President JD Vance announced on June 22 that progress in U.S.-Iran talks had reopened the Strait of Hormuz, easing supply risks and driving oil prices down 4% that day. For Venezuela, the reopening of a major chokepoint reduces the risk premium that had briefly boosted heavy crude prices, but it also means that any potential recovery in Venezuelan output—currently estimated at under 800,000 bpd—faces headwinds from a market increasingly awash in Iranian barrels. [CNBC, Jun 17] [Marine News Magazine, Jun 22]

The structural factor that will determine whether Venezuelan crude oil production can reach 1.7 million barrels per day in 2026 is the country’s ability to attract foreign investment and repair its dilapidated refining and extraction network. The U.S. waiver for Iran, described by The Jerusalem Post as a “cold cost-benefit calculation,” signals that Washington is prioritizing diplomatic engagement with Tehran over maintaining maximum pressure on all sanctioned producers. For Caracas, this means that any relaxation of U.S. sanctions—which had previously allowed Chevron to operate under a limited license—remains uncertain. Analysts note that even if sanctions were fully lifted, Venezuela would need billions in capital and years of rehabilitation to approach 1.7 million bpd, making the 2026 target highly improbable without a dramatic and immediate policy reversal. [Traded on Polymarket — $58K Volume

Lower-volume market on Polymarket ($58K). Wider spreads expected — enter with limit orders and be aware of slippage risk. Currently 7c YES.