Venezuela's Proposal to Saudi Arabia: No Increase in Oil Production

Reuters reports that Venezuela has proposed to Saudi Arabia to maintain the current production ceiling of OPEC and non-OPEC countries to help increase oil prices. According to Reuters, Saudi Arabia has apparently welcomed the proposal but is seeking Iran's agreement on it. This comes at a time when Iran is looking to increase its own production. The proposal was made by Yologio del Pino, Venezuela's Minister of Oil, during his meeting last Sunday with Ali al-Naimi, the Minister of Oil of Saudi Arabia, in Riyadh. Based on this report, on Thursday, February 22, some OPEC members are trying to reach a consensus with other members and non-OPEC producers to maintain the current production ceiling so they can combat falling oil prices without reducing the quotas of producing countries. Reuters further reports that the Venezuelan oil minister has shared this proposal with the oil ministers of Russia, Iran, and Qatar during his visit to these countries this month, and is attempting to convince OPEC members to hold a meeting before the organization's oil ministers' meeting in June if producers reach a consensus to reduce production or at least maintain the current ceiling. Sources that provided this news to Reuters also stated that so far, Russia and Qatar have preliminarily agreed to this proposal. The price of oil per barrel in the global market has sharply fallen due to oversupply and the reluctance of OPEC and non-OPEC producers to reduce the production ceiling, reaching $27.10 on Thursday. Iran, which is looking to increase its production and regain its lost market share after sanctions were lifted, is calling for a reduction in the share of Saudi Arabia and some other OPEC producers. In this context, Bijan Zangeneh, the Minister of Oil of the Islamic Republic, has repeatedly stated that with the implementation of the JCPOA (nuclear agreement), they intend to immediately increase oil exports to 500,000 barrels per day. Iran, which was the second-largest oil producer in OPEC before the intensification of sanctions in 2012, has now become the fifth-largest oil producer in the organization. On Thursday, reports emerged indicating that Iran has decided to offer its oil at a greater discount than Saudi Arabia to attract more customers in Asia.