Latin American crude producers under financial strain may help provide a vehicle for market rebalancing that OPEC members and other oil states failed to deliver at a meeting in Doha on April 17.

Iran’s refusal to discuss a ceiling for its growing output at last weekend’s meeting prompted Saudi Arabia to scuttle an agreement that only months ago optimists were betting would gain adherents to redress the worst rout of a generation.

“There’s no question that Mexico, Venezuela and Colombia, are all declining. Clearly, it’s the Atlantic Basin that is being hit on the production side and the rebalancing is well on its way,” said Gary Ross, an oil expert and executive chairman of New York consultancy PIRA.

With current global oversupply at around 1.5 million barrels per day (MMbbl/d), U.S. production is expected to fall by 700,000 bbl/d from year-ago levels, Ross said. Complementing this would be falls of 150,000 bbl/d in Venezuela, 100,000 bbl/d in Mexico and a steep decline in Colombia. Together, this would account for about 1 MMbbl/d of production cuts.

Add in a short-term pipeline cut in Nigeria and a labor strike in Kuwait and the market starts to look a bit more balanced.

Drops in Latin American could also be bigger than forecast. Petrobras aims to marginally lift output this year but has been dogged by the country's worst ever corruption scandal that is slowing investments.

Low prices are pinching budgets needed to pay for new projects, especially in Venezuela, whose output has suffered OPEC’s largest decline since 2014.

Pressed by declining investments in their industries and falling exports, OPEC members Venezuela and Ecuador have pushed hard for a joint production cut since late 2014, but the efforts have proven insufficient to gain support from the world's largest crude producers, Russia and Saudi Arabia.

With fewer options to generate needed dollars from oil exports, the Latin American OPEC members have less to invest in oil infrastructure. And that may lead to further production declines, said Michael Cohen, head of commodities research at Barclays in New York.

“What’s happening this year and in the next two years will have a profound impact on the investment,” he said. “You’ll get to a point where those countries will have difficulty attracting investment to new production.”

Barclays has forecast major capital spending in Latin America to decline 18.2% this year, after falling 19.1% last year, a larger drop than most other regions.

Venezuela’s crude output declined 11.9% to 2.53 MMbbl/d in the first quarter of 2016 compared with the same period of 2014, according to OPEC numbers compiled by Reuters. Its drop outstripped even Nigeria, which fell 8.8%.

If Venezuela’s financial situation worsens, output could plunge, cautioned Vikas Dwivedi, global oil and gas strategist at Macquarie.

Production could fall by as much as 400,000 bbl/d if the country’s crude upgraders suffer more breakdowns. Risks include national blackouts as well, he said.

Non-OPEC producer Colombia could also see declines, said Patrick Gibson, research director for global oil supply at WoodMac in London.

Colombia has “a lot of mature production with high investment costs,” which weighs on its ability to stay competitive, Gibson said.