Venezuela Said to Request Emergency OPEC Meeting in Letter

[FBaggins]

Source: Bloomberg

Venezuela wrote to fellow OPEC producers requesting an emergency meeting as the collapse in oil prices hurts the group’s most vulnerable members, according to five people with knowledge of the matter.

The letter was sent to the 12 other members of the Organization of Petroleum Exporting Countries, the people said, asking not to be identified as the document isn’t public.

Venezuela has repeatedly called for OPEC members to meet as slumping oil prices sap government revenue. De facto leader Saudi Arabia, which has insisted it won’t cut production unless non-OPEC exporters cooperate, signaled again on Jan. 17 that it will stick to its strategy of defending market share.




Ecuador is the only country to have publicly backed the move since Bloomberg News reported Venezuela’s request for a meeting after President Rafael Correa said Wednesday an output cut would support prices.



Read more: http://www.bloomberg.com/news/articles/2016-01-20/venezuela-said-to-request-emergency-opec-meeting-amid-oil-slump

[Roland99]

1. One-product nations are in trouble

Saudi Arabia, Venezuela

Lack of a diversified economy (and oligarch control of what *is* there) is a recipe for economic disaster.

[MadDAsHell]

2. Not sure what you mean by "oligarch" controlled; isn't oil nationalized in both of those countries?

[Roland99]

3. Technically, but who runs that? And all the oil companies that pull the oil out?

[EX500rider]

4. Well in Venezuela it'd be the government...

Petróleos de Venezuela, S.A. -PDVSA, (Petroleum of Venezuela) is the Venezuelan state-owned oil and natural gas company. It has activities in exploration, production, refining and exporting oil, as well as exploration and production of natural gas. Since its founding on 1 January 1976 with the nationalization of the Venezuelan oil industry, PDVSA has dominated the oil industry of Venezuela, the world's fifth largest oil exporter.

https://en.wikipedia.org/wiki/PDVSA

And in Saudi Arabia it'd be the government..

Saudi Aramco, officially the Saudi Arabian Oil Company, most popularly known just as Aramco (formerly Arabian-American Oil Company) is a Saudi Arabian national petroleum and natural gas company based in Dhahran.
In 1973, following US support for Israel during the Yom Kippur War, the Saudi Arabian government acquired a 25% stake in Aramco. It increased its shareholding to 60% by 1974, and finally took full control of Aramco by 1980, by acquiring a 100% percent stake in the company.

https://en.wikipedia.org/wiki/Saudi_Aramco

[Igel]

7. Careful of definitions.

An oligarch is one of a small number of people who rule a country.

We've extended it to wealth shakers and makers, but strictly speaking if there's a relatively closed government with a small number of people who actually pull the strings, they are oligarchs.

As opposed to autarchs (or monarchs) or in a democracy. Venezuela is very much like Russia in this regard, just apparently opposite sides of the mirror.

[MadDAsHell]

5. You're expecting a boogey-man that isn't there. The government runs it in both countries. nt

[Nuclear Unicorn]

6. So, they want to artificially raise prices that will hurt consumers in order to protect their money.

[FBaggins]

8. Well... yeah

That's the point of a cartel after all.

[happyslug]

9. Thus, it is up to Putin

Russia is either the #1 or #2 exporter of oil, has been since the 1860s. Till the 1960s, Russia shares the top stop with the US, since the 1960s with Saudi Arabia. Today, Saudi Arabia and Russia export about the same amount of oil, and together they export more the the next 10 oil exporters (some calculations say next 15 exporters).

Thus if the following it true "De facto leader Saudi Arabia, which has insisted it won’t cut production unless non-OPEC exporters cooperate, signaled again on Jan. 17 that it will stick to its strategy of defending market share." the non=OPEC exporter Saudi Arabia is referring to is Russia and this Putin.

What will Putin take to cut Oil Exports? Given that his forces are fighting Saudi supported opposition to Assad in Syria? This is complicated by Putin's take over of the Crimea. The Crimea, is now majority Russian Speaking, but the Crimea Tartars have a long history with ties with Turkey. Turkey is now a de factor ally of Saudi Arabia. The present leadership of Turkey sees the Tartars as the "Rightful" people of the Crimea and thus its "rightful rulers" ignoring that they make up less then 10% of the present population of the Crimea (and as such not even a factor in the fight between the Ukraine and Russia over the Crimea).

Turkey is also reviving the "Young Turks" ideology of the late 1800s, that saw the homeland of the Turks, modern Turkmenistan as part of Turkey, even through it was part of the Russian Empire prior to WWI, and a member state in the Former Soviet Union till 1989 and a de facto satellite of Russia ever since (Its Army still trains in Russia and has a huge Russian population, that controls most of the Farming done in Turkmenistan and Russia is the #1 trading partner of Turkmenistan).

Thus Saudi Arabia has conflicts with Russia and includes Saudi Arabia de facto alliance with Israel, which puts Turkey and Saudi Arabia opposing Assad in Syria and Iran.

"De Factor" is Latin for "In Fact" as oppose to "De Jure" which means "by law". The above "De Facto" Alliances are just that, alliances in fact but nothing is in writing thus not a true "Alliance". At times such "De Facto" alliances are more important then "De Jure" Alliances, for the later people can talk themselves out of or outright cancel when it is no longer convenient for them. De facto Alliances rely on the FACT it is advantageous to both parties to work together, thus they do and right now in the Middle East you have two "De Facto" Alliances, the first is Turkey, Saudi Arabia and Israel, the second one is Hezbollah, Assad and Iran (With the Christians of Lebanon part of the alliance but presently neutral in the Fighting in Syria).

This all comes int play when it comes to who cut what oil exports and right now neither Saudi Arabia nor Russia wants to for both sees any cut by them giving money to the other side.