Oil expert Dan Yergin on as to why Venezuela could cause a good ‘big shock’ to the essential oil markets

If the global oil industry suddenly loses Venezuela’s 2 million barrels of daily oil creation, it could be “a big shock to the system,” according to Dan Yergin, vice chairman of IHS Markit.

“It would be described as a very tight industry, as a result of course you already have creation restraints by OPEC and non-OPEC,” Yergin told CNBC at the Abu Dhabi Petroleum Exhibition and Meeting on Tuesday.

Oil markets are increasingly worried over potential supply constraints due to the economic turmoil in Venezuela deepens. Development in Venezuela possesses been falling and the economic difficulties have affected additional investments in the sector. As the economic situation deteriorates, creation might continue steadily to fall from its maximum potential, thus limiting the availability on the market.

Venezuela, an OPEC nation and one of the primary oil producers on the planet, has conducted credit debt renegotiations with foreign traders since Monday. Even so, it is unclear whether President Nicolas Maduro will flourish in these talks.

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