Venezuela Considers OPEC Exit Amid Growing Group Fragmentation

The Organization of the Petroleum Exporting Countries (OPEC) is facing a critical test of its global market influence as Venezuela, a founding member, contemplates exiting the alliance. This potential departure comes shortly after the United Arab Emirates (UAE) withdrew from the group, and amid growing alignment between Caracas and the United States.

While a Venezuelan exit would not immediately disrupt global oil supplies, market experts warn it could severely damage OPEC’s unity and its power to regulate crude prices. The group is already grappling with internal friction, as Iraq has also expressed discontent over its assigned production caps. Analysts suggest that further splintering could trigger aggressive competition for market share among producers and limit OPEC’s capacity to manage global supply gluts.

“The very cohesion and credibility of OPEC could be at stake,” noted Ali Al Riyami, the former director general of oil and gas marketing for Oman’s energy ministry, questioning if this could trigger a larger wave of departures.

OPEC and its allies (OPEC+) are already losing global market share to surging production from non-member nations like the U.S., Brazil, and Guyana. Meanwhile, geopolitical conflicts have forced Saudi Arabia and other Gulf nations to restrict their output, and Russia’s export capabilities remain hampered by the war in Ukraine.

Hamad Hussain, a climate and commodities economist at Capital Economics, warned that these developments signal OPEC’s waning market dominance, which could lead to increased price volatility.

Because years of economic instability and international sanctions have crippled Venezuela’s oil infrastructure, the country is currently exempt from OPEC’s quota system. Consequently, its departure would have negligible immediate effects on global supply, even if Caracas secures new energy deals with Washington.

However, the long-term ramifications are substantial. Combined, the departures of Venezuela and the UAE would strip OPEC of over 5 million barrels per day of production capacity—representing approximately 17% of the core group’s capacity projected for early 2026. Furthermore, Venezuela possesses the planet’s largest proven crude reserves, which could yield massive output in the future if foreign investment returns.

The UAE exited the cartel in April following prolonged disputes over production limits that restricted its newly expanded capacity. Angola also departed in 2024, and Iraq has cautioned it may exit if an upcoming capacity review does not grant it a higher production ceiling.

Managing the market could become even more challenging for OPEC if geopolitical tensions in the Middle East ease and full Gulf supplies return to the market. Forecasters, including the International Energy Agency, predict a global oil surplus in such a scenario, which would force OPEC+ to consider further supply cuts. If that happens, Saudi Arabia may have to bear the brunt of those reductions.

“OPEC is fighting what is starting to look like a losing battle against significant changes in the geopolitics of oil,” said Henning Gloystein, managing director for energy and resources at Eurasia Group, pointing to the combination of shrinking membership, rising U.S. supply, and China’s shifting demand patterns as key factors eroding the cartel’s authority.