CARACAS: Venezuela’s embattled President, Nicolás Maduro, is still seeking to find a way around lower oil prices.
On Monday night, as he celebrated OPEC’s 55th birthday in Caracas, Mr Maduro said it was time for the oil-producing cartel to convene a heads of state meeting, writes the FT’s Andres Schipani.
Earlier that day a former Venezuela governor to OPEC told Reuters that these gatherings of leaders, unlike extraordinary meetings, do not require the consensus of all members. Yet the source added that having Saudi Arabia -and non-member Russia- in line is crucial if they want to, somehow, affect prices.
But powerful members, such as Saudi Arabia, are sticking to their strategy of keeping the oil taps open allowing prices to fall to maintain their market share.
This is dashing Mr Maduro’s hopes as Venezuela’s economy is ravaged by galloping inflation, a dire recession, and widespread shortages of basic goods. Venezuela is agonising with the drop in oil prices, as 96 per cent of its foreign income comes from oil exports.
Economists in Caracas say the country with the world’s largest crude reserves loses $700m for every dollar drop in the oil price. They estimate Venezuela needs a barrel at $130 to balance its budget – but last week its oil basket was trading at around $41.
During the gathering Mr Maduro remembered one of OPEC’s founders, the late Venezuelan Juan Pablo Pérez Alfonzo, who interestingly, once said: “Ten years from now, twenty years from now, you will see: oil will bring us ruin… oil is the Devil’s excrement.”
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