OPEC’s two Latin American members are not doing well at all.
Venezuela’s President Nicolas Maduro said Tuesday that he is seeking a deal with OPEC and Russia to stabilize oil prices, as Venezuela’s oil export basket is set to drop to $30 per barrel or less. And Ecuador President Rafael Correa revealed Tuesday that the country has become the first member of the 12-member group that is producing at a loss.
Maduro: Another Call For OPEC-Russia Alliance
“We’re moving to see if an OPEC-Russia alliance can achieve the miracle of stabilizing prices,” Maduro said.
Venezuela’s President Nicolas Maduro
“Venezuelan oil dropped $2 today. It reached $35…I think it’s going to reach $30 or drop even further,” he said during his weekly television broadcast as reported by Reuters.
Because of its higher content of heavy oil, the Latin American OPEC member’s petroleum export basket, which includes crude oil and refined products, trades at a discount to other benchmarks.
Venezuela’s oil prices averaged approximately $88.42 in 2014. They have fallen precipitously over the past year, worsening an economy that is in free fall, marked by shortages of basic goods and services and rendering it likely that Maduro’s Socialist Party will lose key upcoming parliamentary elections.
Correa: “A Very Difficult Year”
President Rafael Correa said that Ecuador is receiving as little as $30 per barrel for its oil, while production costs average approximately $39.
“We are going through a very difficult year economically because the price of oil collapsed,” Correa said in a speech Tuesday.
Ecuador’s President Rafael Correa
In terms of production, Ecuador is OPEC’s second-smallest member, with daily output of 538,000 barrels last month, according to Bloomberg. Ecudador’s main blend of crude, Oriente, sold for $36.32 on Wednesday versus $43.21 for Brent crude, which is a higher-quality crude.
According to the EIA, Ecuador suffers from “operating difficulties at existing, mature oil fields.”