Venezuela Considers $50-60 Per Barrel Oil Price Acceptable for Economy

Caracas hopes that the global oil market will stabilize in the range of $50-60 per barrel, Russia's ambassador to Venezuela told Sputnik.

MEXICO CITY (Sputnik) — Venezuela considers global oil prices of up to $60 per barrel sufficient to keep to the state budget and ensure investments into the energy sector, Russian ambassador to Venezuela Vladimir Zaemsky told Sputnik.

"Caracas hopes for the world's oil market to stabilize in the range of $50-60 per barrel, which is preferable for the Venezuelan economy and will allow the country to smoothly resolve its current problems, stick to the government budget and secure investments into the sector," Zaemsky said.

Venezuela, which is a member state of the Organization of the Petroleum Exporting Countries (OPEC) and relies heavily on oil exports, has been hit hard by the ongoing slump in the global oil market that saw prices fall to their lowest level since the early 2000s in 2015.

Caracas welcomed Wednesday's OPEC decision, taken on the sidelines of  the International Energy Forum in Algeria, to work toward imposing a cartel output ceiling, the ambassador said.

On Wednesday, OPEC member states reached a preliminary deal to set the output ceiling at 32.5-33 million barrels a day for the whole cartel. The date of oil output freeze is expected to be presented at the cartel's upcoming meeting in November. Venezuelan President Nicolas Maduro called the deal "historic."

"The government is justified in saying that the historic decision was made possible due to the steps taken by President Nicolas Maduro in 2015-2016 toward unifying the efforts of the main hydrocarbon producers to stabilize the oil market. Venezuelan experts also note Russia's constructive position on the issue," Zaemsky stressed.

Global oversupply and stagnating demand have caused oil prices to plunge from $115 per barrel in June 2014 to less than $30 per barrel in January 2016. Prices recovered amid Nigerian, Canadian and Venezuelan output outages and growing demand in May, reaching a peak of over $50 per barrel in early June.

Crude prices are currently fluctuating between $45 and $50 per barrel.

Russia, Venezuela Have No Need in Oil Price Stabilization Deal

Russia and Venezuela do not need an oil market stabilization agreement similar to the one reached recently by Moscow and Riyadh, Vladimir Zaemsky told Sputnik.

On September 5, Russian Energy Minister Alexander Novak and Saudi Arabia’s Minister of Energy, Industry and Natural Resources Khalid bin Abdulaziz Al Falih signed a joint statement to step up cooperation in stabilizing the oil market and ensuring stable long-term investment in the energy sector.

"As for the possibility of an agreement similar to the Russian-Saudi one, as I see it, the level of cooperation between our countries in this area is quite high as it is, as exemplified by regular Russian-Venezuelan contacts," Zaemsky said.

The two countries have recently acquired significant experience in cooperating in the energy sector, he added.

"Over the recent years, our countries have gained considerable experience in cooperating in this area, including high-level and highest-level meetings. Our points of view often match, and when we do have minor differences, the sides try to take mutual interests and suggestions into account," the ambassador said.