Maduro's Call to Beef Up Oil Prices at OPEC Summit Likely to Fade

On Monday, Maduro urged the Organization of the Petroleum Exporting Countries (OPEC) to schedule a high-level meeting, as the current low oil prices are endangering economies that rely heavily on energy sector revenues.

MOSCOW (Sputnik), Alexander Mosesov — The call by Venezuelan President Nicolas Maduro to convene an OPEC meeting to discuss ways of bolstering oil prices will not be taken seriously, experts told Sputnik on Wednesday.

World oil prices have fallen by nearly two-thirds since mid-2014 due to market oversupply, with Brent crude averaging $48.94 per barrel and WTI $45.68 per barrel as of September 16. Despite this downward trend, OPEC has not altered its production policy, with no decision to decrease oil output levels announced to date.

Doomed Proposal

Answering a question on whether Maduro's call will be welcomed, Tim Boersma, acting director of the Brookings Institution's Energy Security and Climate Initiative, told Sputnik that he did not expect any production-cutting decisions to be made by OPEC.

Johns Hopkins University Applied Economics Professor Steve Hanke also said that Maduro's ideas "will not be met positively. Venezuela is viewed as a country that is [gone] off the reservation."

Trends Research Institute head Gerald Celente told Sputnik that even in June 2014, Saudi Arabia "made it clear" that it would maintain high oil production levels in order to put pressure on its competitors in the global market.

According to Celente, these competitors for market share include the US shale industry, Canada, North Sea producers and Russia.

Those Who Benefit

Commenting on the impact of low prices on OPEC economies, Tim Boersma said that all of the group's member countries would be happy to see prices rise.

"The question seems to be which ones are willing to take some financial pain in order to maintain market share," Boersma underlined.

Steve Hanke said that the countries least vulnerable to low oil prices are all located in the Middle East. "Their lifting costs are below $10 per barrel," Hanke explained.

At the same time, Gerald Celente said that even Saudi Arabia is issuing bonds "to make up for the shortfall of low oil prices" and it needs a $100 per barrel prices to balance the budget.

"Among the poorer OPEC nations (including Maduro’s Venezuela) that rely heavily on oil exports to sustain their economies, there is a real threat of domestic unrest should crude prices continue to drop and their economies sink into deep recession and/or depression," Celente concluded.

OPEC raised its 2015 global oil demand forecast by 1.46 million barrels per day to 92.79 million barrels a day for this year. Such a revision, however, seems to be insufficient for a U-turn in oil market tendencies. And Maduro's call to change these tendencies by means of curbing oil production will not be taken seriously, as experts believe.