Venezuela weighs OPEC exit

Venezuela is considering withdrawing from the Organization of the Petroleum Exporting Countries (OPEC), a move that could further weaken the oil group's influence over global crude markets, Bloomberg News reported, citing people familiar with the matter.

The idea has been discussed with U.S. officials, although no final decision has been made, according to the report. A withdrawal would mark a major shift for Venezuela, one of the five founding members of OPEC in 1960 and a key player in the organisation's creation.

The potential exit comes as Washington deepens ties with Caracas and negotiates long-term access to Venezuela's oil reserves. The talks include a possible 100-year lease on several oil fields, according to Bloomberg.

Venezuela produced around 1.16 million barrels per day (bpd) in July, according to a Bloomberg survey, less than half its output a decade ago. Its departure would therefore have a limited immediate impact on global oil markets.

However, an exit could deepen concerns over OPEC's cohesion following the United Arab Emirates' departure from the group earlier this year, which weakened its ability to influence crude prices.

In a note following the report, Citi analyst Scott Gruber said the opportunity for oilfield services companies in Venezuela is significant, "but whether the reported talks translate into increased investment remains to be seen."

"Taking a step back, the opportunity does reflect a broader theme: namely, that the next wave of material oil volume growth is likely to come from outside the U.S., providing globally diversified oilfield services companies with exposure and therefore a hedge against potential downside pressure on crude prices," Gruber added.

"Indeed, even if Brent falls towards $65 per barrel — Citi Commodities' 2027 forecast — we believe diversified oilfield services companies can still grow revenues."