Iran Press/ Europe: Negotiations between the US and Venezuela are directly related both with the OPEC+ decision and with the EU’s plans to ditch Russian oil before the end of 2022, says Alfa Bank Senior Analyst Nikita Blokhin.
Venezuelan heavy oil is the most attractive alternative for consumers in the US and Europe since its properties are close to Russia’s Urals brand, he notes.
Most likely, the talks initiated by the US are held in preparation for the introduction of a price cap on Russian oil in December which may lead to a reduced supply of sulfur crude oil on the global market, the expert thinks.
It is doubtful that even by reaching some political deals with Venezuelan President Nicolas Maduro, the US would be able to offset the OPEC+ led reduction in output with Venezuelan supplies, says Commodity Market Analyst at Otkritie Investment Oksana Lukicheva. "Venezuela’s entire production is less than the reduction of OPEC+ quotas," she notes. In her assessment, Venezuela’s August production amounted to merely 0.7 mln barrels per day.
Currently, the political situation of Maduro and his allies is much stronger than in 2019 and even in 2021, since the opposition has been broken apart, according to Deputy Director of the Russian Academy of Sciences’ Institute of Latin American Studies Dmitry Rozental. However, the economic situation in the country remains very critical while its oil industry is in need of Western technologies and investments, in addition to legal exports. Therefore, Maduro is interested in Washington easing the sanctions, supplies to the US and some normalization of relations in exchange for concessions, the limits of which so far are difficult to assess, the expert says.
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