Although Venezuela will officially propose that the Organization of Petroleum Exporting Countries (OPEC) adopt an oil price band of between $80 and $120 per barrel, the goal is to stabilize prices at an average of $100 per barrel, according to the Minister of Oil and Mining, Rafael Ramírez.

“Our position is to defend oil prices. The proposal of the price band is to be discussed. We believe that not a single producer, not a single country, wants to have low prices. We defend an average price of $100 per barrel,” Ramírez said.

Ramírez, who is also president of the state-owned oil company Petróleos de Venezuela (PDVSA), warned of the damaging consequences of a collapse in oil prices not only for producers but also for consumers, since the investments needed to produce oil in high-cost areas would be affected.

“We are not going to wait for oil prices to reach $70 per barrel to begin a discussion of the band issue. We know that oil prices have been affected by factors like geopolitical instability and economic prices, especially in the Euro zone,” he said.

Ramírez also said that the concept of a price band is a structural proposal to guarantee stability in the global oil market.

The average price of Venezuelan oil is currently $108 per barrel, which is $58 more than what was estimated in the country’s 2012 budget, the oil minister said. He added that even in the worst-case scenario, the provisions adopted by the government of President Hugo Chávez will guarantee continued funding for social programs and PDVSA’S oil and gas projects.

PDVSA / Press Office – Venezuelan Embassy to the U.S. / June 29, 2012