Trump’s oil grab is a big problem for the Opec cartel

Subscribe to enjoy similar stories. OPEC members struggling to preserve their market share amid a sinking price for oil now have an unexpected new variable to contend with: President Trump’s move to dominate Venezuela’s oil supply and push the market in a direction that would benefit American consumers.

Trump, who has long championed increased oil production and a target price of $50 a barrel, is planning a sweeping initiative to rehabilitate Venezuela’s oil fields and market its output, people familiar with the matter said. That would reshape the global oil map—putting the U.S.

in charge of the output of one of the founding members of the Organization of the Petroleum Exporting Countries and, along with America’s own prodigious production, give it a potentially disruptive role in a market already struggling with oversupply. While analysts expect that reviving Venezuela’s dilapidated oil industry will take huge investments and a lot of time, they say even a small near-term output increase—followed by a larger rise over the longer run—could exacerbate the global imbalance and push prices further down.

OPEC members now face the difficult question of whether to try to prop up prices by cutting supply at the risk of hurting their revenue and market share—and potentially their relationships with the unpredictable U.S. president.

“The onus is on everyone to manage their own interests but at the same time not poke the bear," said David Oxley, chief climate and commodities economist at Capital Economics. “That’s an inherent tension weighing on the global market." Some members believe if the Venezuelan administration changes regulations to make the oil industry attractive to American investors, the country could pump an extra 2