Whatever arrangements were being worked out between Venezuela and other non-OPEC countries and the OPEC countries are not likely to occur as planned. The Oil Minister of Venezuela said a deal to freeze oil production did not come to fruition, and he blamed lobbying from the United States as the reason why according to Angel.co.
Venezuela definitely would have benefited from a freeze in oil production. Currently, the nation’s economy is in terrible shape due to a drought and other economic woes. Venezuela is heavily reliant on oil exports for its economy. The supply of oil in the world is massively high right now. As the laws of supply and demand are prone to show, high supply leads to lower costs. The price of oil per barrel is very inexpensive right now. Countries such as Venezuela are not able to earn desirable amounts of revenue as a result.
Venezuela is not the only country suffering. Saudi Arabia recently procured $10 billion in loans to help its economy due to the drop in oil prices. Texas and North Dakota, two states in the U.S. that reaped huge rewards from oil revenues, are experiencing economic downswings.
Iran is expected to release millions of barrels of oil into the global market due to the lifting of sanctions. Hence, the price of oil won’t increase any time soon. Improvements in the economy of Iran are also not likely to occur soon either.