Reasons why Maduro visits Azerbaijan first within his “oil tour”

Reasons why Maduro visits Azerbaijan first within his “oil tour”

Baku, Azerbaijan, Oct. 22

By Maksim Tsurkov – Trend:

President of Venezuela Nicolas Maduro has arrived in Azerbaijan on an official visit. This arrival and its results are of great interest, because this visit is literally historic for several reasons.

This is the first official visit of the president of Venezuela to Baku. Moreover, it is the first-ever visit of a president of South American country to Azerbaijan. Another interesting fact is that this trip is a part of a tour by Nicolas Maduro to oil-producing countries, and Azerbaijan became the first country the Venezuelan leader visited as part of his “oil tour.”

On Oct. 21, immediately upon his arrival in the capital of Azerbaijan, Maduro put forward a proposal to develop a new formula for stabilization of oil prices for the next 10 years.

Venezuela is working on a new formula to ensure stability and a new mechanism for determining prices of the country’s natural resources for the next 10 years, when there will be stability and one will be able to predict the level of production, market and prices, said the president of Venezuela.

Maduro’s proposal at first envisages stabilization of the oil market for the next six months and then the development of a new mechanism to determine oil prices and the formula of their stabilization for a decade.

Thus, namely within this tour Venezuelan president plans to sign new agreements to stabilize global oil prices, and therefore, Azerbaijan won’t become an exception in the list of countries of his “oil tour” and one should expect at least some important oral agreements from the current visit.

This demonstrates peculiar role of Azerbaijan in energy matters, considering the fact that such energy giants as Saudi Arabia, Iran and Qatar are among the countries included in the final list of the “oil tour”, and earlier Maduro expressed desire to visit Russia as well.

Also, the fact that Azerbaijan has originally taken a constructive position in the issue of stabilization of oil prices through production freezing at a certain level, as well as in all other issues of global and regional significance was not disregarded.

Azerbaijan has clearly expressed its position during the discussions prior to the Doha meeting. The Qatari meeting, held in April, came to nothing owing to the destructive position of some OPEC members.

Now the oil producers are attempting to achieve at least some progress on the issue of stabilization of "black gold" prices. At the Algerian OPEC informal meeting, held in September, it was agreed to limit oil production to 32.5-33 million barrels of oil per day. Despite the fact that there are no agreements on specific limits for each country, the market responded with sharp rise in oil prices, which have been standing at 50 dollars per barrel for several weeks, to a single news about the agreement.

It is expected that the final decision would be taken at OPEC meeting in Vienna Nov. 30, and it can be assumed what kind of leap in oil prices is expected in the case of a positive decision.

OPEC also expects that oil producers outside the organization will also join to the agreement and it has already enlisted Azerbaijan’s support.

At the same time, Azerbaijan’s President Ilham Aliyev clearly expressed the country's position on this issue, saying that Azerbaijan will not unilaterally increase oil production, even without waiting for other decisions of OPEC member countries, in an interview with the Director General of Rossiya Segodnya Dmitry Kiselyov for Sputnik.

From this point of view, the visit of the president of Venezuela – a country that is an OPEC member since its foundation - in Azerbaijan seems absolutely logical. Maduro will surely inform leaders of those countries about Azerbaijan's position when he visits them in the course of his tour.

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Maksim Tsurkov is Trend Agency’s staff journalist, follow him on Twitter: @MaksimTsurkov

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