As oil prices tumble, Venezuela and Iran have called on their peer crude producers to prop up prices that have fallen over 30% from their June high to a four-year low ahead of the Organization of Petroleum Exporting Countries (OPEC) meeting that will be held on November 27, according to Reuters.
Since June, oil prices have fallen from around $115 per barrel to below $79 per barrel – a four-year low – amid weak demand and plentiful supplies.
On Sunday, according to Reuters, Iran’s Oil Minister accused some countries of “making up excuses to justify their refusal to stabilize prices by cutting output”, in which could be viewed as a possible reference to a recent Saudi Arabian official whom insisted the issue should be left for the markets to determine.
“Certain countries had raised their production after the exit of several countries from the cycle of oil production,” Iranian Oil Minister Bijan Zanganeh said, according to Reuters, referring to sanctions that have driven his country to cut their exports sharply.
“Now it is difficult for them to reduce their production for market stability and they fabricate different pretexts for their action,” Iran’s Oil Minister said, according to Reuters, citing the nation’s News Agency, Shana.
Amid the plunge in oil prices, Venezuela, Ecuador, and a Libyan OPEC official have been the only nations that have publicly called for OPEC to cut oil output, according to Reuters.
Both Kuwait and Iran, however, have both said that a reduction in oil put is not likely.
Venezuela has been the most concerned among the group of OPEC nations – and rightfully so – as the nation has been facing a crisis on a domestic front amid a number of challenges. Furthermore, the nation relies heavily on oil as it accounts for 97% of its foreign exchange revenue.
As oil prices fell off a cliff, Venezuelan President Nicolas Maduro dispatched Foreign Minister Rafael Ramirez on a five nation campaign to rally up support from oil producing nations to defend oil prices
“We are in a campaign to defend Venezuela, Venezuelan oil, international markets and the price of oil … Oil sustains the development of our economic and social life,” Maduro said on Thursday.
The announcement from Venezuela’s President came after delivering the news that Venezuela had lost 30% of its foreign exchange revenue in dollars over the last month due to the “tremendous” drop in oil prices.
While visiting Iran, Venezuela’s Foreign Minister Ramirez said that both Tehran and Caracas held a mutual stance on the oil market, according to Reuters, who cited the Iranian Oil Ministry’s News Agency Shana.
“We believe that the prices are at a very low level and instability in the market is in no one’s interest,” Ramirez told Iran’s Shana News Agency.
“A hundred dollars per barrel is the desirable price for Venezuela,” Ramirez said.
Iranian Oil Minister Bijan Zanganeh also made such similar remarks, Reuters reported.
Venezuelan Foreign Minister Rafael Ramirez also told Venezuela’s Telesur TV channel that he would continue efforts to coordinate actions to defend the price in oil which he said was falling “for no apparent reason”.
Venezuela will earn $16 billion less in 2015 than this year and based on the nation’s current spending rates they will need oil prices to rise to $110 a barrel in order to balance its accounts, according to a Jefferies analyst whom warned clients in a research note last Wednesday, according to Bloomberg.
Both Venezuela and Iran will need higher oil prices to balance their respective budgets more than their peer OPEC members, Reuters notes.
Sources: Bloomberg, Reuters
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