Power struggle in Venezuela could hit oil market, says Saudi Arabia; Latin American nation sits on world's largest crude reserves

Riyadh: The crisis in OPEC member Venezuela, where the president is locked in a power struggle with the Opposition, could impact the oil market, Saudi Arabia’s energy minister Khalid al-Falih said on Monday. [caption id=“attachment_1144503” align=“alignleft” width=“380”] File image of Venezuela’s President Nicolas Maduro. Reuters[/caption] “Of course, developments in Venezuela may have an impact on the (oil) markets …We are watching developments there, and there could be an impact on the oil market balance,” al-Falih told Al-Arabiya news channel. Oil production in Venezuela has dropped sharply in the past months from over two million barrels per day to around 1.4 million bpd. The Latin American nation sits on the world’s largest crude reserves of over 300 billion barrels, most of it heavy crude that is costly to produce. Venezuelan President Nicolas Maduro and opposition leader Juan Guaido have been locked in a power struggle since Guaido proclaimed himself “acting president” Wednesday amid angry protests over the country’s economic woes. The standoff has split the international community between nations that recognise Guaido as president, including the US and a dozen countries in the region, and those that still recognise Maduro, including Russia and China. OPEC members and their non-cartel producers late last year decided to cut output by 1.2 million bpd to shore up sluggish prices. The six-month agreement that includes major non-OPEC producer Russia took effect from the beginning of January. Falih said it was premature to say if the production cuts deal would be extended.