OPEC Faces Existential Threat as Venezuela Considers Exit

Venezuela may leave OPEC, a move that would challenge the cartel's ability to maintain unity and control global oil prices. The country, a founding member of the alliance, has seen its influence wane in recent years due to economic crises and US sanctions.

OPEC's role as a market stabilizer has diminished since its founding in 1960. Rivals such as US shale producers, Brazil, and Guyana have undercut its dominance, while geopolitical conflicts have reduced the influence of traditional leaders like Saudi Arabia.

The potential exit of Venezuela, combined with the UAE's withdrawal and rumblings of discontent from Iraq, could slash OPEC's daily output by over 5 million barrels. This would be a significant blow to the cartel, according to Jorge Leon of Rystad Energy, who emphasized both the symbolic and operational impact.

OPEC has struggled to balance competing interests among its members, with internal disputes over production limits growing in recent years. The group's reliance on production cuts and quotas has also eroded its authority.