Venezuela is considering leaving OPEC as it deepens ties with Washington, Bloomberg News reported, citing people familiar with the matter. No final decision has been made, but the talks include a possible 100-year U.S. lease on several Venezuelan oil fields.
Venezuela is weighing an exit from the Organization of the Petroleum Exporting Countries, according to people familiar with the matter cited by Bloomberg News. The idea has been discussed with U.S. officials, though no final decision has been made.
A founding member reconsiders its place
A withdrawal would mark a major shift for Venezuela, one of the five countries that founded OPEC in 1960 and played a central role in creating the cartel. The potential exit comes as Washington deepens ties with Caracas and negotiates long-term access to Venezuela's oil reserves. Those discussions include a possible 100-year lease on several oil fields, Bloomberg reported.
Limited output, but a symbolic blow to OPEC
Venezuela produced about 1.16 million barrels per day in July, according to Bloomberg's survey — less than half its output a decade ago. Its departure would therefore have limited immediate impact on global oil markets.
However, an exit could deepen concerns over OPEC's cohesion after the United Arab Emirates left the group earlier this year, weakening the group's ability to influence crude prices.
Citi flags a sizable oilfield services opportunity
In a note following the news, Citi analyst Scott Gruber said the oil field services opportunity in Venezuela is sizable, according to Investing.com: "but whether the reported discussions lead to an investment ramp is TBD." He added that the next round of material oil volume growth likely occurs outside the U.S., giving globally diversified oil-field-services names a hedge against downward pressure on crude prices — even if Brent falls toward $65 per barrel under Citi's 2027 estimate.
Source: Economy News
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