OPEC gathers Thursday in the Venezuelan capital of Caracas, in a meeting that will highlight the powerful role long played by the host country in the oil cartel -- and the limits to that power.

Venezuela conceived of creating the Organization of Petroleum Exporting Countries with Saudi Arabia in the late 1950s. Ever since, the midsize South American oil producer has punched above its weight by providing the cartel with policy ideas. Keeping oil prices within a price band by varying supply, for instance, was a Venezuelan idea adopted by OPEC.

Today, Venezuela is led by the in-your-face populist Hugo Chávez, who is waging a propaganda war with the U.S. and extracting tough terms from foreign oil companies operating in his country.

"The spotlight will be on Chávez," says Michael Wittner, head of energy research at London-based Calyon Bank. "He'll have his soapbox."

What Mr. Chávez does with his soapbox is anybody's guess. One possibility is that he could announce the long-awaited investment terms for international oil giants eager to develop heavy-oil deposits in Venezuela's Orinoco region -- one of the largest stores of crude left on the planet. Putting a high price on access to Orinoco could snuff out investment in the region, constricting a huge source of future oil supply and thus buttressing prices.
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