The Future of OPEC
Trump's sensitive blow through Venezuela
Discussions about the future of the Organization of the Petroleum Exporting Countries, or simply OPEC, following Trump's announcement of a deal with Venezuela have quieted down for now. There has been no official decision yet, but the situation is developing in such a way that Venezuela's withdrawal could happen at any moment.
What will such a scenario give the global market?To put it briefly, nothing in the short term. Venezuela was already exempt from OPEC+ restrictions, and the current oil production level, which has reached over 1 million barrels, remains low.
The current 1.1–1.2 million barrels per day are incomparable to previous levels and the country's potential capabilities. However, recovery to even 2 million will require many years of work and tens of billions of dollars in extraction investments.
Venezuela has effectively restored production levels to the crisis period that hit the country in the late 2010s due to active pressure from the American government on the Maduro administration. This did not require any massive investments.But further improvement in this matter is impossible without continuous investment. Only after years of permanent access to capital, technology, and diluents for extra-heavy oil will the global market feel the effects of Venezuela's exit from OPEC.
More important is the symbolic damage to the organization. Venezuela is one of OPEC's founding members. Its possible withdrawal will serve to further weaken the structure's position, especially following the UAE's exit this spring.Moreover, Venezuela has proven oil reserves exceeding 303 billion barrels, and although in practice these figures are just numbers (most of them represented by heavy and extra-heavy oil, which is difficult to extract), this will reduce OPEC's share of global reserves on paper.
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