Venezuela weighs OPEC exit as U.S. ties deepen, Bloomberg reports

Venezuela is contemplating leaving the Organization of the Petroleum Exporting Countries (OPEC), a move that could weaken the cartel's influence over global crude markets, according to Bloomberg News. The idea has been discussed with U.S. officials, though no final decision has been made, the report revealed. This potential exit marks a significant shift for Venezuela, one of the five founding members of OPEC in 1960 and a central figure in its inception.

The move comes as Washington strengthens ties with Caracas and negotiates long-term access to the country's oil reserves, including a possible 100-year lease on several oil fields. While Venezuela's output of about 1.16 million barrels per day in July is less than half of what it was a decade ago, the exit would have a limited immediate impact on global oil markets.

However, it could deepen concerns over OPEC's cohesion following the UAE's recent departure, weakening the organization's ability to influence crude prices. Citi analyst Scott Gruber noted that Venezuela's oil field services opportunity is substantial, but the potential for investment ramp-up is uncertain. The move reflects a broader trend, with the next round of significant oil volume growth likely occurring outside the U.S., offering diversified oil service firms exposure and a hedge against potential downward pressure on crude prices.

Even if Brent crude falls towards $65 per barrel, diversified OFS names are still expected to grow revenues.