Location Venezuela Venezuela

Venezuela Announces Oil Countries Agree to Emergency Meeting

Venezuela sent their oil minister on a tour of oil-producing nations in a last-ditch effort to soothe the effect the plummet in oil prices is having on the country.

Six OPEC member states and two non-members have agreed to attend an extraordinary meeting should one be called, Venezuela’s Oil Ministry announced Wednesday.

OPEC members Iraq, Algeria, Nigeria, Ecuador, Iran and Venezuela plus non-member oil producers Russia and Oman would meet if a summit was called, the ministry told Bloomberg after Venezuelan Oil Minister Eulogio Del Pino held talks in Iran.

“The idea is to not just hold a meeting, but for all the countries to attend with the intention of reaching agreements,” Del Pino said in the statement. “Current prices are below equilibrium, and that encourages the speculators and market instability.”

Venezuelan President Nicolas Maduro sent Del Pino on a tour of oil producers in a last-ditch effort to soothe the effect the plummet in oil prices is having on the country’s finances. So far, he has visited Russia and Iran.

Del Pino has ended the first leg of an official tour that will take him to OPEC countries, including Qatar, Iran and Saudi Arabia, where he will also present his plan aimed at stabilizing global oil prices, which have dipped by more than 70 percent over the past 18 months.

Venezuela has been calling for an emergency OPEC meeting since oil prices began falling in 2014, but has faced a Saudi Arabia that insists on maintaining their current oil production in order to defend their share of the market in response to increasing shale production in the U.S. and the competition of a post-sanction Iran, that is not only entering the market but increasing their oil output by about 500,000 barrels a day.

Del Pino will try to persuade oil-rich countries to cooperate in cutting oil production to boost the price of oil to at least US$60 a barrel.

Brent crude has dropped from US$115 a barrel in June 2014 to less than US$30 last month.

Low prices have particularly affected commodity exporting countries like Venezuela, which rely almost exclusively on oil income to support their economy and social programs.

Saudi Arabia, which maintains huge influence in OPEC, is currently running into difficulties after their huge gamble last November opting to flood the market and drive out their rivals.

According to analysts, the oil-rich kingdom will start running into major trouble within two years as it relies on oil for 90 percent of its budget revenues.

Lack of industry and an expensive campaign of regional funding rooted in a foreign policy of countering Iranian influence, including the onslaught in Yemen, is expected to deplete Saudi financial resources.

In 2015, Standard & Poor’s lowered their outlook of Saudi Arabia to “negative,” branding the country’s economy “undiversified and vulnerable.”


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