No final decision has been taken in Caracas, but the possibility of withdrawing from the Organization of the Petroleum Exporting Countries has figured in discussions involving Venezuelan and US officials. Such a move would carry powerful symbolism because Venezuela was one of OPEC’s five founding members when the organisation was established in Baghdad in 1960.
The immediate impact on global crude supplies would probably be modest. Venezuela produced about 1.12 million barrels a day in July, a fraction of the volumes supplied by Saudi Arabia and other leading producers. The country is also exempt from the production restrictions governing several OPEC+ members, limiting the practical consequences of abandoning the group’s quota system.
The longer-term significance could be considerably greater. Venezuela possesses more than 303 billion barrels of proven crude reserves, the world’s largest national stockpile, and Washington is seeking to channel substantial US investment into fields that have suffered from years of underinvestment, sanctions, operational disruption and infrastructure deterioration.
The potential departure is being considered as Caracas moves rapidly towards closer commercial ties with Washington. US President Donald Trump announced an agreement on Friday under which American interests would gain majority control over development rights covering more than 65 billion barrels of Venezuelan reserves. The arrangement encompasses oilfields in the Orinoco Belt and Lake Maracaibo regions and is intended to draw about $100 billion in private investment.
Chevron is separately preparing agreements that would expand its Venezuelan operations, including its Petropiar heavy-crude venture and additional acreage in the Orinoco Belt. Oilfield services company SLB has also secured access to petroleum data held by state producer PDVSA as Venezuela seeks to modernise its information systems and improve the reliability of reserves and production records.
The shift is already visible in trade flows. Venezuela exported about 1.16 million barrels a day of oil in July, compared with 1.2 million in June. Shipments to the United States climbed to roughly 786,000 barrels a day, their highest level since early 2019, while Chevron exported about 293,000 barrels a day from its joint ventures.
That growing dependence on the US market contrasts sharply with Venezuela’s political and commercial alignment during much of the previous two decades, when sanctions forced Caracas to rely heavily on China and other buyers willing to handle discounted crude.
For OPEC, another withdrawal would reinforce doubts about its ability to reconcile producers seeking higher output with members that favour continued supply management.
The UAE formally left OPEC on May 1 after years of disagreement over production ceilings. Abu Dhabi had invested heavily in raising its crude capacity towards five million barrels a day but remained constrained by quotas substantially below that level. Its departure removed one of OPEC’s largest and most technically capable producers.
Iraq has also sought higher production allowances as it tries to increase revenue and accommodate new investment in its oil sector. Baghdad remains committed to OPEC but has pressed the group to recognise expanding capacity and severe fiscal pressures.
Those tensions come as OPEC+ already faces diminished control over market conditions. Its share of global crude production dropped from more than 48% before this year’s Middle East conflict to roughly 40% in July after war-related disruptions reduced output from several producers and the UAE withdrew.
Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman have meanwhile been gradually reversing voluntary production cuts introduced in 2023. They agreed in July to increase August output by another 188,000 barrels a day, maintaining a strategy of returning supply while retaining the option of reversing course if market conditions weaken.
Venezuela occupies an unusual position within that framework because its output is not subject to the main OPEC+ restrictions. Production has recovered from the historic lows reached during the country’s economic collapse and sanctions period, but remains far below the more than three million barrels a day pumped around the turn of the century.
Rebuilding towards those levels would require enormous investment. Much of Venezuela’s extra-heavy crude needs specialised processing, diluents and upgrading facilities, while ageing pipelines, power shortages and years of deferred maintenance remain significant constraints.
US refiners nevertheless have a strong commercial incentive to secure Venezuelan barrels because many Gulf Coast facilities were designed to process heavy sour crude. Increased Venezuelan supply could therefore displace some heavier imports from Canada, Mexico and the Middle East if production rises substantially.
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