Venezuelan oil production at a four-year high is expected to decline quickly if the US follows through on threats to reinstate sanctions on the nation.

The Biden administration on Tuesday said sanctions relief to Venezuela’s oil and gas sector will be allowed to expire on April 18, unless the government holds free and fair presidential elections. 

While it’s unclear whether the US would restore a total ban or allow oil major Chevron Corp to hold limited operations in Venezuela, production could nevertheless drop to 600,000 or 700,000 barrels a day in a matter of months, according to said Fernando Ferreira, director of geopolitical risk at Rapidan Energy Advisors.

The nation’s output stood at 876,000 barrels a day in December, the highest since the US imposed sweeping sanctions against the country and state-owned oil company Petroleos de Venezuela SA in early 2019. 

“It’s too premature to estimate what’s going to happen, but if I were a buyer of Venezuelan crude I’d stock up before April 18,” said Ferreira.

Since the broad easing of sanctions in 2022, Chevron has been ramping up production and selling Venezuela oil to US refiners including Valero Energy Corp, PBF Energy and Phillips 66.

The relief allowed Venezuela to resume oil swaps and direct sales to refiners in India and Europe. It also allowed the company to import much-needed diluents from the US. Imports of diluents, used to boost oil production, rose to four cargoes in January, the highest in more than three years. 

The reimposing of sanctions could spur the return of little-known companies that, in the past, have concocted elaborate schemes to help Venezuela keep exporting oil, the source of more than 90% of the country’s revenue.