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No one has proposed the holding of an extraordinary meeting of OPEC and its non-OPEC partners over the chaos in OPEC member Venezuela, Alexander Novak, the energy minister of the non-OPEC leader Russia, said on Thursday.
Venezuela’s opposition leader Juan Guaidó, the president of the National Assembly, declared himself interim president on Wednesday, and the United States supported him against Nicolas Maduro, whom the U.S. Administration declared an “usurper” with no legitimacy to the presidency.
Maduro, in turn, severed diplomatic ties with the U.S. on Wednesday and gave U.S. diplomats in Venezuela 72 hours to leave the country.
Right-leaning Latin American nations, including Brazil, Colombia, and Argentina, also recognized Guaido, while leftist Cuba and Bolivia support Maduro.
Russia, China, and Turkey stay by Maduro, with Russia saying Maduro is the legitimate president and warning the U.S. against a military intervention.
Asked today whether the political crisis in Venezuela could lead to higher oil prices, Russia’s Energy Minister Novak told news agency TASS that the oil market is very complex and it is difficult to forecast how it would react to the developments in Venezuela.
According to the IMF, Venezuela’s economy is expected to collapse by another 18 percent in 2019. More than 3 million Venezuelan people have fled the country amid an aggravating humanitarian crisis and an extreme poverty rate of 40 percent.
The economic collapse adds to years of mismanagement and underinvestment in the oil industry to further complicate attempts in Venezuela, one of OPEC’s five founding members, to stop the steep decline of its oil production.
OPEC figures show that Venezuela’s crude oil production dropped by another 33,000 bpd from November to just 1.148 million bpd in December, compared to average 1.911 million for 2017.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.