Venezuela requests for emergency OPEC meetingby Indrajit Sen on Jan 20, 2016
Venezuela wrote to fellow OPEC producers requesting an emergency meeting as the collapse in oil prices hurts the group’s most vulnerable members, according to Bloomberg.
The letter was sent to the 12 other members of the Organisation of Petroleum Exporting Countries, sources told Bloomberg.
Venezuela has repeatedly called for OPEC members to meet as slumping oil prices sap government revenue.
De facto leader Saudi Arabia, which has insisted it won’t cut production unless non-OPEC exporters cooperate, signalled again on January 17 that it will stick to its strategy of defending market share.
Ecuador is the only country to have publicly backed the move since it was reported that Venezuela had requested for a meeting, after Ecuadorian President Rafael Correa said Wednesday an output cut would support prices.
Venezuela is one of the so-called ‘Fragile Five’ OPEC members most at risk from significant instability amid the turmoil in prices, according to RBC Capital Markets LLC. That group also includes Libya, Iraq, Nigeria and Algeria.
“It is not the first time and probably not the last time Venezuela will ask for an emergency meeting,” Giovanni Staunovo, an analyst at UBS Group AG, said by e-mail. While “an extraordinary meeting would just make sense if OPEC is willing to cut,” cooperation from non-OPEC nations has been a prerequisite for Saudi Arabia to curb supply, he said.
Holding an emergency meeting would require approval from all member countries. Saudi Arabia and its Gulf allies are unlikely to support an unscheduled meeting, according to three OPEC delegates.