Venezuelan Oil Minister Due in Tehran

Venezuelan Oil Minister Due in TehranVenezuelan Oil Minister Due in Tehran

Venezuela's Oil Minister Eulogio Del Pino will visit Tehran on the second leg of his foreign trip on Wednesday to discuss the global oil market with his Iranian counterpart Bijan Namdar Zanganeh.

Del Pino is on a mission to lobby for putting a cap on an oversupply of crude oil that has pushed prices down 70% since mid-2014, Shana reported.

The two sides are expected to mull over solutions to recover tumbling oil prices as well as the prospect of additional Iranian crude that would pile more pressure on the already oversupplied market.

The Venezuelan minister discussed the possibility of a meeting between OPEC members and non-OPEC Russia with senior oil officials of the country on Monday and Tuesday.

Moscow said last week it is open to joining hands with OPEC member states to devise a plan to address crumbling oil prices. Reuters cited two OPEC delegates as saying that a gathering could take place in February or March, perhaps at an expert rather than ministerial level.

Oil crash is taking a heavy toll on Venezuela, which almost exclusively relies on oil income to support its economy and has fewer financial reserves to cushion them against lower prices. 

Del Pino is also expected to visit Riyadh and Doha to convince OPEC members of a production cut that can help boost prices.

In a major policy shift in November 2014, members of the Organization of Petroleum Exporting Countries, led by Saudi Arabia, opted to maintain instead of cutting output—a major decision that sent prices spiraling downward to $30 per barrel.

The politically-driven decision was an effort to drive out US shale producers posing a real threat to a traditional oil market dominated by Russia and Saudi Arabia.

According to the International Energy Agency, the US became the largest oil and natural gas producer in 2014, but tumbling prices sent many higher-cost shale producers into the red or bankruptcy.

The move has also come at a hefty price for the Saudis. The kingdom posted a record $100-billion budget deficit in 2015 but has yet to backpedal on its pump-at-any-price policy.

US investment bank Goldman Sachs said it is "highly unlikely" to see a Russian-OPEC bond.