Venezuelan President Nicolas Maduro has named a powerful ally sanctioned by the US as a drug kingpin, along with a cousin of the late socialist leader Hugo Chavez, to revamp his country's oil industry amid massive fuel shortages.

Tareck El Aissami was appointed oil minister and Asdrubal Chavez were tapped to head state-run oil giant PDVSA. 

Both positions were occupied until now by General Manuel Quevedo, who during his 28-month tenure watched as oil production in the country sitting on the world's largest petroleum reserves collapsed by 65%.

The shake-up comes amid crashing global oil prices and after two decades of plummeting crude production at Venezuela's state-ruin oil firm equal to 19% of levels when the late President Chavez took power in 1999.

Venezuelans in recent weeks have experienced critical petrol shortages even in the capital Caracas, the seat of politics and concentration of wealth normally spared shortages across the nation.

US Immigration and Customs Enforcement recently added El Aissami to its list of 10 most-wanted fugitives.

He was sanctioned in 2017 as allegedly being a major drug trafficker and was indicted two years later on allegations of violating those sanctions.

Despite having the world's largest oil reserves, Venezuela's political and social crisis continues to deepen, as the US and a coalition of nearly 60 nations press Mr Maduro to stand down.

Those nations recognise opposition politician Juan Guaido as Venezuela's legitimate president, arguing that Mr Maduro's election in 2018 was a sham because the most popular opposition candidates were banned from running.

A key adviser to Mr Maduro, El Aissami, 45, has served previously as vice president and most recently minister of industry. He is among dozens of Maduro allies sanctioned by the US, while Mr Chavez has not been targeted by the Trump administration with financial measures.

Risa Grais-Targow, the director for Latin America at Eurasia Group, said El Aissami's appointment underscores Mr Maduro's efforts to inject more professional management of the country's oil industry.

While PDVSA faces multiple challenges, from low crude prices to falling production, the new oil team's first priority will be finding supplies that are on the verge of running out as US sanctions have made fuel imports harder to come by, she said.

"Within Chavismo, El Aissami is a relative pragmatist," said Ms Grais-Targow. "But it's an extremely difficult situation on any front."

She also said US sanctions on El Aissami are likely to complicate his efforts.

"This tells you they're throwing in the towel about a sanctioned individual being an impediment to future oil deals and engaging with foreign partners," she said. "Or maybe it's just an implicit recognition of their reality."