A Venezuelan exit would carry limited immediate supply implications given the country currently sits outside OPEC’s production quotas following years of steep output decline.
The more significant risk for markets is reputational and structural: any departure would renew questions about the cohesion of the Saudi-led group and its capacity to manage prices effectively
A deeper US-Venezuela energy relationship aimed at expanding Venezuelan output over time would add a further source of potential supply growth to a market already facing forecasts of a widening surplus in coming years. — Earlier: Iran says it is preparing list of conditions for reopening Strait of Hormuz Oil catch up post: Snaps losing streak as Trump rules out reviving Iran ceasefire terms — Venezuela’s possible OPEC exit is less about barrels today than about what a deepening US energy partnership could mean for the cartel’s influence tomorrow. Summary: Venezuela is reportedly considering withdrawing from OPEC and has discussed the option with US officials, though no final decision has been made, per Bloomberg. Venezuela sits outside OPEC’s production limits due to prior output decline, so a withdrawal would be unlikely to have a large direct effect on supply.
The bigger risk is what the move could signal about the cohesion of Saudi-led OPEC and its price-setting ability. Some US officials reportedly envisage a US-Venezuela energy partnership aimed at building an “oil power” that would weaken OPEC, potentially adding downward pressure on prices over time. Venezuela is reportedly weighing an exit from OPEC and has discussed the possibility with officials in Washington, though a final decision has yet to be made, according to Bloomberg.