Venezuela is closely examining plans to leave OPEC, according to people familiar with the matter, delivering a fresh blow to the oil cartel it helped create more than six decades ago.
The idea of an exit has been a topic in conversations with US officials, and no final decision has been made, said some of the people, asking not to be identified discussing private information. A White House spokesperson had no immediate comment, and Venezuela’s Information Ministry didn’t respond to requests for comment.
The move would illustrate the sweeping political realignment in Caracas since US President Donald Trump ousted longtime leader Nicolás Maduro and took control of the nation’s oil sales. Just four months ago, the United Arab Emirates announced it would leave OPEC, threatening the group’s unity and its sway over crude prices.
Separately, the US is negotiating a deal to take a large stake in Venezuelan oil fields, Bloomberg and Axios reported earlier.
Once a prominent member of the Organization of the Petroleum Exporting Countries, Venezuela’s importance has ebbed in recent years as US sanctions and domestic economic crises have gutted its oil industry. The country pumped 1.16 million barrels a day in July, according to a Bloomberg survey, less than half the amount it produced a decade ago. Output, however, has risen this year.
Given its diminished production, Venezuela’s potential exit is unlikely to have much immediate impact on global oil markets, which are currently dominated by the shockwaves of the US’s war with Iran.
Yet the idea is gaining traction amid public frustration with the obligations of membership expressed by Iraq and others. A Venezuela exit would stoke doubts over whether OPEC — led by Saudi Arabia — can continue to hold together and influence crude prices. A further breakdown could plunge members into a fierce contest for market share, reprising the price war they briefly waged in 2020.
Some US officials envision an oil powerhouse built from an alliance between the US and Venezuela that would greatly diminish OPEC’s influence, one of the people said.
While Caracas isn’t subject to any OPEC production limits now given the scale of its slump in recent years, another person said that freeing the country from any potential quotas would help it maximize production over the longer-term and thus lower prices. Washington would be able to pursue its plans for the country’s oil sector unfettered by obligations to another group, the person said.
Venezuela’s potential withdrawal from OPEC could pave the way for international oil companies from the US and elsewhere to play a larger role in helping rebuild the nation’s oil sector, potentially adding to the global oil surplus anticipated in coming years by the International Energy Agency and other prominent forecasters.
Caracas’ potential separation would be a victory for Trump, a long-time critic of OPEC and its ability to push up oil prices and fuel costs for American consumers.
Since US forces captured Maduro on Jan. 3 and acting President Delcy Rodríguez took power, relations between Washington and Caracas have shifted from isolation to a deepening partnership as Trump exerts significant leverage over the nation and its vast natural resources.
The Trump administration has restored diplomatic ties, reopening its embassy in Caracas and engaging in direct talks with Rodríguez and her top ministers, using a combination of sanctions relief, access to global finance and control over oil revenues to steer policy.
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Venezuela was one of the five oil producers that founded OPEC in 1960 and is widely considered the most influential country in the group’s creation, due to the assiduous diplomatic efforts of its oil minister at the time, Juan Pablo Perez Alfonzo.
The cartel and its partners have played a significant role in world oil markets ever since, from the Arab oil embargo of the 1970s, to massive output cuts that stabilized prices and aided much of the global petroleum industry during the 2020 pandemic.
Venezuela was also instrumental in the birth of OPEC , the alliance formed in 2016 between core cartel members and outsiders including Russia that gave the then-fading organization a new lease on life.
In recent years, however, the coalition’s power has appeared to ebb again. US shale drillers and other rivals around the world have eroded its ability to influence prices. And massive discoveries in Guyana and Brazil have diluted its dominance over production.
In late April, the UAE announced it would promptly withdraw from OPEC in order to make use of newly-expanded production capacity unfettered by the group’s system of output quotas – an increasingly urgent priority as the energy transition away from fossil fuels reshapes patterns of fuel consumption.
Iraq vented its own long-simmering frustrations with OPEC output limits in June, warning that it could consider leaving the organization if denied a higher output level as part of a group-wide audit of members’ abilities. Baghdad subsequently downplayed the threat.
Because of the country’s output losses, OPEC had for many years exempted Venezuela from any output quotas or agreements to participate in further cutbacks.
With assistance from Fabiola Zerpa, Grant Smith and Jennifer A. Dlouhy.
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