Venezuela is the world's fifth largest oil exporting country and has the world's largest proven oil reserves at an estimated 296.5 billion barrels (20% of global reserves) as of 2012. In 2008, crude oil production in Venezuela was the tenth-highest in the world at 2,394,020 barrels per day (380,619 m3/d) and the country was also the eighth-largest net oil exporter in the world. Venezuela is a founder member of the Organization of the Petroleum Exporting Countries (OPEC).
Today, Venezuela is the fifth largest oil exporting country in the world with the second-largest reserves of heavy crude oil (after Canada). Canada and Venezuela have significant potential for capacity expansion; Venezuela could potentially increase production capacity by 2.4 Mbbl/d (380,000 m3/d) from 2001 level (3.2 MMbpd) to 5.6 MMbpd by 2025 - although this would require significant amounts of capital investment by national oil company PDVSA.
By 2010, Venezuelan production had in fact declined to ~2.25 Mbbl/d (358,000 m3/d). PDVSA have not demonstrated any capability to bring new oil fields onstream since nationalizing heavy oil projects in the Orinoco Petroleum Belt formerly operated by international oil companies ExxonMobil, ConocoPhillips, Chevron and Total.Current Venezuela oil imports into the US can be found at this link. Currently, imports into the US from Venezuela run about 25 million bbls monthly (let's say about a million bopd).
US imports from Mexico are in the very same ball park, 20 to 27 million bbls/month.
I assume (it can easily be verified but I'm not going to look it up now) that both Venezuelan and Mexican oil is a heavier oil preferred by the US refineries along the Gulf Coast.
One can argue that the Obama administration okayed the US light oil for Mexican heavy oil swap because Mr Obama really, really likes Mexico and really, really likes the US oil and gas industry and did what the oil and gas industry has been advocating for a very, very long time.
Hold that thought.
Take a look at this white paper: Venezuela, Unnatural Disaster. If Venezuela is in as bad a shape as I think it is, it's very possible there could be an interruption in Venezuela's crude oil production and exports. When a country falls into anarchy, its workers tend to stay home to protect the family rather than venture into work.
I can imagine a PowerPoint presentation that steps the US through a scenario in which Venezuelan oil supply becomes unreliable.
Perhaps, just perhaps, the Obama administration did not okay the Mexican heavy oil swap because it liked the oil and gas industry. Perhaps, just perhaps, the administration was shown what the price of gasoline could go to if refiners can't get the heavy oil they need to balance out the light oil.
