Venezuela exit threat deepens OPEC strains

Venezuela is weighing whether to leave OPEC, raising fresh questions about the producer group’s cohesion only months after the United Arab Emirates ended its membership and further weakening the organisation’s hold over global oil supply.

No final decision has been taken in Caracas, but the possibility has emerged during discussions with US officials as Venezuela seeks to rebuild its battered petroleum industry and attract large-scale foreign investment. A withdrawal would carry particular symbolic weight because Venezuela was one of the five countries that founded the Organization of the Petroleum Exporting Countries in Baghdad in 1960.

The deliberations come alongside negotiations that could give US companies long-term access to Venezuelan oilfields. Washington and Caracas are discussing arrangements covering selected fields in the Orinoco Belt and around Lake Maracaibo, potentially allowing American energy groups to develop reserves and secure crude supplies for the US market.

Such an agreement could accelerate Venezuela’s oil recovery after years of sanctions, underinvestment, infrastructure failures and political upheaval sharply reduced production. Output was around 1.2 million barrels a day in July, far below levels exceeding 2.5 million barrels a day a decade ago and a fraction of the country’s longer-term potential.

The implications for OPEC would initially be more political than physical. Venezuela has struggled for years to produce enough crude for its formal quota obligations to become a meaningful constraint. Leaving the organisation would therefore remove little supply from OPEC’s practical production-management system immediately.

The longer-term impact could be considerably greater. Venezuela possesses the world’s largest officially recognised crude reserves, much of them heavy oil concentrated in the Orinoco region. A sustained revival backed by international capital could eventually add substantial volumes to world markets, particularly if Caracas were no longer participating in OPEC production restraints.

That possibility comes at an awkward moment for the organisation. The United Arab Emirates announced in April that it would leave OPEC from May 1 after years of tension over production targets and the treatment of its expanding capacity. The UAE had produced about 3.4 million barrels a day in 2025 and possessed effective capacity of roughly 4.2 million barrels a day, making its departure significantly more important to the group’s supply influence than Venezuela’s would be in the short term.

OPEC’s membership has contracted before. Qatar left in 2019 to focus on natural gas, Ecuador departed in 2020 and Angola withdrew at the start of 2024 after disagreements over production quotas. Indonesia has also suspended its membership at different points. The loss of the UAE, however, removed one of the organisation’s most capable producers and sharpened debate over whether national strategies are becoming harder to reconcile with collective supply management.

Venezuela would represent a more historic rupture. Together with Iran, Iraq, Kuwait and Saudi Arabia, it established OPEC at a time when producing countries were seeking greater control over their petroleum resources and pricing. Venezuelan officials played an influential role in the organisation’s creation and later defended coordinated producer action through repeated periods of market turbulence.

The shift under consideration reflects the country’s changing energy relationships. Washington has become increasingly involved in Venezuelan oil sales and investment discussions, while Caracas is trying to reverse years of declining output by opening more of the sector to outside capital. Any large expansion would require billions of dollars for drilling, pipelines, upgrading facilities, electricity supply and repairs to ageing infrastructure.

US companies could have an advantage if investment conditions improve. Chevron already has extensive experience in Venezuela, while ExxonMobil and ConocoPhillips possess technical expertise suited to complex heavy-oil developments, although unresolved commercial and legal issues would influence any return by companies that previously lost assets in the country.

Oil markets are also evaluating the possibility of greater Venezuelan supply against broader geopolitical pressures. Brent crude traded near $89 a barrel on Friday and West Texas Intermediate around $83, with prices heading for weekly declines as improved tanker movements through the Strait of Hormuz eased some fears about disrupted Gulf exports.