New York (CNN Business) Venezuela's oil industry is at risk of collapsing due the problems with the economy and power grid, according to the International Energy Agency.

"Although there are signs that the situation [with electricity] is improving, the degradation of the power system is such that we cannot be sure if the fixes are durable," said the agency, a watchdog for western oil consuming countries, in a post on its site Friday.

Much of the country was without power for much of the last week. The embattled government of Nicolas Maduro said Thursday the power had been restored , but there were still reports of outages.

Venezuela produces about 1.2 million barrels of oil a day when operating normally, said the IEA. But the agency said there are a number of factors that could blunt the i the loss of Venezuelan oil on the global oil market.

First and foremost is the cut in production agreed to by OPEC and some non-OPEC countries, which also equals 1.2 million barrels a day.

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