OPEC exit domino? Venezuela said to weigh withdrawal

Venezuela, home to the world's largest proven oil reserves, is considering withdrawing from OPEC, Bloomberg reported Friday, citing sources familiar with the matter.

The sources told Bloomberg that Venezuelan officials had discussed a potential OPEC exit with US counterparts, though no final decision has been reached. The White House and Venezuela's communications ministry declined to confirm the report.

The move comes amid a sweeping shift in Venezuela's political landscape after the United States forcibly removed President Nicolas Maduro's government in January.

Venezuela had been exempt from OPEC production quotas because US sanctions had sharply curtailed its output. But as American investment is expected to boost production, the constraints of OPEC membership could become an obstacle.

Washington would need Venezuela free of OPEC obligations to pursue its plans to take control of the country's oil industry without interference.

President Donald Trump has long criticized OPEC's cartel-style influence over global oil prices through production quotas. Directly linking US capital to Venezuelan oil fields to raise output and undercut OPEC's pricing power is a consistent policy goal of the Trump administration, which favors lower energy prices.

"Some US officials are envisioning the creation of an 'oil powerhouse' that would dramatically reduce OPEC's influence through a US-Venezuela alliance," one official said.

The United States has already taken control of Venezuela's oil sales rights. Reports have also emerged that Washington is in negotiations to secure large equity stakes in Venezuelan oil fields.

Bloomberg noted that a Venezuelan exit from OPEC would be a victory for Trump, who has long argued that OPEC's efforts to prop up oil prices burden American consumers at the pump.

Venezuela is a founding member of OPEC — one of five countries that established the organization in 1960 — and its only South American member. Its departure would deal a serious blow to the group's authority, built over nearly seven decades, and could trigger a domino effect of further withdrawals.

OPEC has already suffered significant losses: Qatar left in January 2019, Ecuador in January 2020, Angola in January 2024, and the UAE in May this year. In June, Iraq also signaled it might exit, voicing long-simmering frustration over production quotas.

OPEC's membership has now shrunk to 11 countries.

Venezuela currently produces an average of 1.16 million barrels per day — a modest figure — but its vast reserves give it considerable potential to ramp up output.

Bloomberg noted that Venezuela's low current production means an exit would not immediately affect global oil prices. However, a weakening of OPEC's grip could revive the kind of oversupply-driven price war last seen in 2020, when producers engaged in a damaging race to the bottom.

Yet a sharp drop in oil prices would also erode the profitability of US oil companies — a structural contradiction at the heart of Washington's strategy.