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Venezuela asks fellow OPEC members for help

Venezuelan President Nicolas Maduro resumed his tour of oil producers in the Middle East on Monday, as the country seeks protection from plummeting oil prices.

The head of state visited the Saudi capital of Riyadh, where he met with the country's Crown Prince Salman bin Abdulaziz and oil minister Ali Al-Naimi. Saudi King Abdullah bin Abdulaziz, who is still recovering from a bout of pneumonia contracted last month, did not attend.


Venezuelan President Nicolás Maduro
Juan Barreto | AFP | Getty Images
Venezuelan President Nicolás Maduro

"We talked in-depth about important ideas for a strategy of stabilising the oil market, price recovery. An important strategy that we will coordinate," Maduro told reporters at the end of the meeting on Sunday. "We have reached detailed agreements for a new stage of strengthening the OPEC".

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Despite the stated optimism, Maduro offered no further details and there was no comment from the Saudi side on the outcome of the deliberations. The official Saudi Press Agency (SPA) simply said the Venezuelan president was "reassured" of the king's health, and briefly added the talks "dealt with the developments on the international arena".

Venezuela, traditionally an OPEC hawk, faces key deadlines for billions of dollars in foreign debt this year and is considered among one of the most vulnerable oil producers in the 12-member cartel. Most analysts estimate a fiscal break-even price of some 110 dollars a barrel. However, both WTI and Brent futures were trading below $50 Monday morning.

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"The figures that we expect for (Venezuela in) 2014-16 would be devastating: a contraction of the economy of 11.7 percent, accumulated inflation of 600 percent, a currency that will lose 89 percent of its value (an increase in the price of the dollar of 900 percent) and real wages that will lose an accumulated 47 percent," Barclays wrote in a research note in December.

After making stops in Russia, China, Iran and Saudi Arabia, Maduro travels on to Qatar and Algeria on Monday. According to a statement published by Algeria's APS news agency, Maduro will meet President Abdelaziz Bouteflika to discuss "the current crisis in the price of oil, and on the ways and means of turning it around, in the framework of an effort broadened to non-OPEC producers".

Maduro, who came to power following the death of Hugo Chavez in 2013, has long held the view the US was to blame for the recent rout in global crude markets.

"Did you know there's an oil war? And the war has an objective: to destroy Russia," he said in a speech just before the New Year. "It's a strategically planned war...also aimed at Venezuela, to try and destroy our revolution and cause an economic collapse".