Trump backs Venezuela staying in OPEC

President Donald Trump said on Wednesday that he believes it would be better for Venezuela to remain in the Organization of the Petroleum Exporting Countries, or OPEC, but added he was unsure if that would be a better situation for the United States.

“Well, I think it’s better for them if they do it,” Trump said in a Reuters interview when asked if the administration supports Venezuela remaining in the oil cartel.

“I don’t know that it’s better for us … but they are a member of OPEC, and we haven’t discussed that with them at all," Trump added.

Venezuela, a founding member of the oil cartel, sits atop some of the world’s largest crude reserves but has seen output collapse in recent years amid economic turmoil and sanctions. Trump has sought to assert control over Venezuela’s oil supply after the US ousted President Nicolás Maduro in an operation earlier this month.

Trump's administration has said it would need to control Venezuela's oil resources indefinitely as it seeks to rebuild the country's oil industry and exert pressure on the Caracas government.

Pressed on whether Venezuela, under a US-influenced oil policy, would be expected to abide by OPEC production limits, Trump said the question was premature and outside his remit.

“I don’t have to worry about it right now, because, you know, I have nothing to do with OPEC,” he said.

US control of the Venezuelan oil industry and future investment to boost capacity could put Caracas at odds with other OPEC members. OPEC is a group of oil-producing countries that work together on supply policy to stabilize oil markets — cutting output when prices fall and increasing output when demand warrants.

While members make decisions collectively, Saudi Arabia, the world’s largest oil exporter, is widely regarded as the producer group’s de facto leader due to its dominant production capacity and ability to raise or cut supply.

In recent interviews, White House aides and outside advisers told Reuters that the subject of Venezuela remaining in OPEC has not been a topic of conversation. They note it could emerge as a flashpoint if Trump seeks to ramp up oil production while OPEC looks to implement cuts to support prices, potentially putting US objectives at odds with the cartel’s strategy.

Some OPEC members that aim to expand oil production often find themselves constrained by the cartel’s quota system, which sets output limits to stabilise global prices. Countries like Iraq, Nigeria and Angola have in the past expressed frustration that the quotas prevent them from fully exploiting their reserves or responding to domestic fiscal needs.