Venezuela Weighs OPEC Exit as OPEC+ Grip on Global Supply Weakens to Four-Decade Low
OPEC+'s share of global crude output has fallen to 40% from above 48% since the Iran war began; Venezuela's potential departure would compound the decline.
Venezuela is considering leaving OPEC, LiveMint reported on Thursday (2026-08-27), a departure that would strip the bloc of one of its five founding members and compound a loss of market control that six months of the Iran war have already made severe.4
OPEC+, the broader group that includes Russia, accounted for about 40% of global crude output in July, according to Reuters calculations based on International Energy Agency data. Before the United States and Israel attacked Iran in late February, that figure exceeded 48%. The four-to-five percentage points attributable to the UAE's separate withdrawal from OPEC in May explain part of the decline. The rest reflects Iran's lost production and disrupted Middle Eastern supply chains since the war began.2,3
The slide in share is historically significant. OPEC's portion of global crude output peaked at roughly 50% during the 1970s oil crises before falling to about 30% by the mid-1980s as North Sea, Alaskan and Siberian production came online. The current 40% mark puts the alliance on a trajectory toward that prior trough. Production announcements from OPEC capitals that once reliably moved markets have had far less impact since the conflict began, Reuters and IBTimes both reported.2,3
China had been the other pillar of market support, but it has pulled back. June Goh, an analyst at Sparta Commodities, told Reuters that Beijing has "become the swing demand center." In 2025, China's buying spree may have accounted for as much as half of all global oil demand growth. Since the war began, China has purchased roughly 400 million fewer barrels of crude than during the comparable period a year earlier, Reuters reported.2,3
Iranian shipments to China capture the pullback most directly. Kpler data show provisional Iranian crude deliveries to China fell to 534,000 barrels per day in August from 823,000 barrels per day in July, a drop of roughly 35% in a single month under renewed U.S. sanctions pressure.3
ICE Brent crude front-month was trading at $94.46 per barrel on Wednesday (2026-09-02), up 0.29%, with NYMEX Heating Oil front-month gaining 1.74% to $4.67 per gallon. Brent's gain is modest for a market simultaneously absorbing sharp Iranian supply reductions and a possible Venezuelan OPEC exit. Yet the muted response likely reflects China's reduced purchase volumes offsetting the supply-side disruptions.3,2
The Venezuela angle carries a longer time horizon. President Trump has said the deal would bring 65 billion barrels under U.S. control, Trend.az reported on Friday (2026-08-28). Analysts cited by OilPrice.com say Washington aims to reshape global energy supply chains, reducing Iran's leverage in any eventual peace settlement while tightening its grip over Caracas's oil revenues, with Venezuela's sanctions relief and access to global finance steered accordingly.5,1
Physical recovery from Venezuela will be slow regardless of those arrangements. Years of declining investment have left the country's infrastructure needing substantial rehabilitation before production can rise materially, Trend.az noted. The deal's near-term impact on physical balances is limited; its weight lies in the structural realignment of who controls long-run supply.5
Asian buyers are already adjusting to a supply map that changes monthly. Gulf exports disrupted by the Iran war, Iranian volumes down sharply, Venezuelan barrels potentially redirected toward U.S.-aligned channels — the cumulative effect narrows sourcing options for China, South Korea, Japan and India. Policy analysts at the East Asia Forum, cited by OilPrice.com, said the war has fuelled doubts about U.S. security commitments in the Indo-Pacific and may push Asian nations toward greater energy coordination among themselves.1
The signal to watch is China's monthly crude import data. When Beijing was buying aggressively, it underwrote OPEC+ price stability from the demand side. With Chinese volumes now running well below last year's pace, any further drop in Iranian receipts, whether through tighter U.S. enforcement or escalation in the conflict, would test how much of the current Brent level reflects genuine demand or simply the absence of a larger selloff.3,2