Venezuela weighs OPEC exit

Venezuela is considering whether it should quit OPEC, potentially delivering a fresh blow to the oil cartel it helped create more than six decades ago, Bloomberg reported, citing people familiar with the matter.

The idea of an exit has been a topic in conversations with US officials, and no final decision has been made.

Negotiators from both countries are discussing that proposal. Some of them said a possible arrangement that has been discussed is a 100-year-lease on several oil fields.

A Venezuelan exit would heighten doubts over whether OPEC can continue to hold together and influence crude prices. A further breakdown could plunge members into a fierce contest for market share, reprising the brief price war of 2020.

Venezuela’s potential withdrawal from OPEC could clear the way for international oil companies from the U.S. and elsewhere to play a larger role in helping rebuild the nation’s oil industry, potentially adding to the global oil surplus anticipated in coming years by the International Energy Agency and other prominent forecasters.

Venezuela was one of the five oil producers that founded OPEC in 1960 and is widely considered the most influential country in the group’s creation. Venezuela was also instrumental in the birth of OPEC+, the alliance formed in 2016 between core cartel members and outsiders including Russia that revived the then-fading organization.