00:00Welcome back. Venezuela has little to gain from leaving OPEC, according to Kepler analyst Amina Bakar.
00:06She says the group remains important to Venezuela as it opens up its oil industry to greater foreign investment.
00:13The question of OPEC membership comes as U.S. companies move back into Venezuela's oil sector.
00:21So it doesn't make sense for Venezuela to leave OPEC at this point in time, or I think ever,
00:27because, I mean, just the fact that Venezuela is a founding member and OPEC was built on the basis that
00:35countries should retain and hold their full control of their resources
00:42and not let foreign countries or foreign companies control their resources.
00:48And that was the idea behind OPEC. So sovereignty is really important here.
00:54And I think OPEC represents that, and Venezuela being a member of OPEC represents, you know, helps the country retain
01:02that.
01:03The Trump administration this week announced that U.S.-backed North American Blue Energy Partners
01:08is set to take over 17 oil fields in Venezuela under a 100-year lease, covering about 65 billion barrels
01:16of reserves.
01:16But Bakar says even if Venezuela leaves OPEC, it would have little immediate impact on the global oil market.
01:24So I would say if it's true, if they do decide, it wouldn't make a big impact at all,
01:31because anyway, Venezuela's current production is something like 1.4 million barrels a day.
01:37They could maybe increase something like 100,000, 200,000 barrels a day over the coming, I mean, we're talking
01:43short term, in one year's time.
01:46But anything over 1.5, you need years of investment, of major investments into infrastructure.
01:54And it's going to take a very, very long time to build beyond that.
01:58And so that's why even the plan that they have now is kind of drawn out over a 25 to
02:0430-year time frame.
02:07Bakar says Venezuela's departure would also be very different from the UAE's, given their very different weight within OPEC.
02:15Venezuela's departure is very different from the UAE's departure, for example.
02:19The UAE was much more of a heavyweight member, since it even held something like 30 percent of the group's
02:27spare capacity.
02:28So it doesn't compare with Venezuela.
02:33And she says a weaker OPEC would not necessarily benefit the U.S., which also relies on stable global oil
02:40markets.
02:42In fact, the U.S. itself benefits from OPEC policy.
02:46The U.S. benefits when OPEC removes volatility and has a steady hand on supply.
02:51So you need this actor and this mechanism.
02:55And there is no other group in the market currently that does this.
03:00And given that, I mean, oil is important, the upstream sector in general, it still generates something like 80 percent
03:07of global demand is met by the upstream sector.
03:12So it's of vital importance.
03:14So if we don't have that mechanism, I think it will be quite chaotic and we'll see huge fluctuation in
03:22prices, as we've seen in other commodities.
03:24So when people want to check on them, we don't county and protect them.
03:26You
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