While analysts were busy calculating how much Iranian oil will come off the market with the U.S. sanctions and whether Saudi Arabia and Russia are offsetting losses, crude oil production in Venezuela “is in free fall” and could soon sink to below 1 million bpd, Fatih Birol, Executive Director of the International Energy Agency (IEA), told Reuters on Tuesday.

“Venezuela production is in a free-fall and we expect that soon it may go to even below 1 million barrels per day,” Reuters quoted Birol as saying on the sidelines of an oil conference in South Africa.

IEA’s head also expressed hope that oil prices won’t rise again this year from the current level of around $73 a barrel Brent Crude.

“I hope that prices do not rise again because this will not really be good news for the global economy which is very fragile,” Birol told Reuters, reiterating his warning from last week that high oil prices had already started to hurt oil demand.

Regarding Venezuela, analysts started to warn in the middle of this year that Venezuelan crude oil production is likely heading for a plunge to below the psychological threshold of just 1 million bpd as early as by the end of this year.

Venezuela’s oil production has been in free fall for two years. Outside of war-induced outages, Venezuela is suffering the worst loss of oil production in history amid an unprecedented economic collapse, years of mismanagement and underinvestment in the oil industry, an aggravating humanitarian crisis, and a leader who is hell-bent on clinging to power. Venezuela’s inflation will surge to one million percent by the end of this year as the country with the world’s biggest oil reserves remains stuck in a profound economic and social crisis, the International Monetary Fund (IMF) predicts.

As per OPEC’s secondary sources, Venezuela’s oil production plunged by 42,000 bpd from August to average just 1.197 million bpd in September. This compares to an average 2.154 million bpd for 2016 and 1.911 million bpd for 2017. OPEC’s production figures for October are due out on November 13 with the next Monthly Oil Market Report.

By Tsvetana Paraskova for Oilprice.com

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