Venezuela Fears Oil Supply Catastrophe, Backs Iran
Venezuela's Oil Minister Eulogio del Pino fears a "catastrophe" if oil inventories continue accumulating to record levels, but nevertheless backs fellow OPEC member Iran's right to increase production once international sanctions are lifted.
Del Pino and Foreign Minister Delcy Rodriguez met this week with OPEC member representatives in Caracas, according to a statement on Friday from the Oil Ministry, to discuss strategies for strengthening prices.
The statement quoted Del Pino as saying that excess buying has boosted oil inventories, pushing storage utilization to 90 percent of capacity, with predictions it could hit 100 percent in the first quarter of 2016.
"When that happens, we might be at the doors of a catastrophe," said del Pino, who is also president of Venezuelan state oil company PDVSA.
He and Rodriguez reiterated price hawk Venezuela's call for a special summit of heads of state of OPEC and non-OPEC producers, and its support for Iran's imminent output increase.
"Venezuela maintains its position that Iran has every right to return to the oil market, given that they themselves lowered crude exports because of the sanctions promoted by the United States," the statement said.
Tehran plans to raise supply by at least 1 million barrels per day, or one percent of global supply, after sanctions end in early 2016.
Venezuela is one of the hardest hit producers by the more than halving of global oil prices in the last 18 months.
This year's oil revenues are down 68 percent from the previous year, according to President Nicolas Maduro, and Venezuela's crude basket fell to just $29 this week.
The South American nation of 29 million is in a deep recession and has the world's highest inflation.
(Writing by Andrew Cawthorne)
