The IMF said the economic crisis in Venezuela, one of the founding members of OPEC, is "profound" as a substantial drop in oil production takes its toll.

In an outlook on Latin America, the International Monetary Fund noted real gross domestic product for Venezuela is on pace to drop 18 percent this year, the third year in a row for a double-digit decline.

"Venezuela remains stuck in a profound economic and social crisis," the IMF's report read.

Facing widespread condemnation, Venezuelan President Nicolas Maduro in May secured another six-year term in office in an election his global critics called a sham. U.S. Secretary of State Mike Pompeo has since issued a call for Venezuela's suspension from the Organization of American States because of "an unconstitutional interruption in democratic order."

A country report from the U.S. Energy Information Administration, meanwhile, found that Venezuela's oil industry has been mismanaged for decades. More recently, some of the workers at state-run oil company Petroleos de Venezuela, or PDVSA, have been jailed on corruption charges.

For the Venezuelan economy, oil revenue was $22 billion last year, compared with about $70 billion in 2011. Total Venezuelan exports are 10 percent lower than 2016 levels.

Secondary sources reporting to economists at the Organization of Petroleum Exporting Countries said Venezuela production averaged 1.3 million barrels per day in June, down 37 percent from the 2016 average.

OPEC economists reported the June rig count, which offers a loose gauge of exploration and production activity, was down 32 percent from the 2016 average.

For the economy, the IMF said Venezuela's economy is collapsing and inflation is on pace to surge to 1 million percent by the end of the year. The deterioration runs the risk of spilling over into other regional economies.

For the rest of Latin America, the IMF said it expected GDP to grow by 1.6 percent this year and then accelerate to 2.6 percent in 2019. Those projections, however, are lower than previous IMF forecasts.

"Escalating trade tensions and conflicts are increasing downside risks to the current outlook, including through their potential impact on uncertainty and investment," the IMF added.

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