A lot of US refineries were built to handle Venezuelan crude, which is very heavy, & it's not far away so transport is cheap, so it could benefit some US refiners - unless those refineries have been modified in recent years. I don't know.
Yes, absolutely. Though I wouldn’t say a lot, but there are refineries.
What I am saying is that an increase of oil supply by say 1-2% worldwide, what many have been suggesting this recent shenanigans will do, would drop the oil prices sufficiently to have major consequences on the American oil industry itself and shale in particular. While the refineries would do just fine (provided they can process the heavy sour), the oil patch, ie the extracting side of the business, will be in trouble, a significant loss of jobs, etc. They are likely not drilling any new wells as it is at the current prices; with lower prices, they will have to shut down the existing ones, starting with those with higher break-even costs and down the ladder from there. Some reasonable people have actually been suggesting that every Trump’s action so far that had a potential to affect the prices of oil was meant to make sure the prices do not drop beyond a certain ceiling (I would think of about $60-70 per barrel as this is about what the US shale needs to break even, legacy wells aside). I, personally, do not subscribe to this line of thinking, but it is not a farfetched proposal. Trump cannot lose these voters from the patch. Even if inflation keeps printing hot, the oil prices will stay up in that range at least, in my opinion, as it is not the core reason for inflation nowadays, not in the US or here, anyway.
However, any significant increase in production in VZ is simply impossible in short or medium term as significant investment is required. The current estimates vary greatly. The lowest I saw was over $100B ($110-130B, if I recall correctly), from Raystad. And they go as high as $700-$1,000B. Internal PDVSA documents had shown that upwards of $60B needed for the pipelines alone because the existing infrastructure has not been updated (and was hardly serviced, really) for the past several decades. It’s a lot of money. Provided a) the regime is here to stay, b) midterm elections in the US will likely lead to the reds losing both chambers of Congress, c) next presidency unclear, but not unlikely that would be lost too… no one serious is going to invest any significant amount of money into VZ today or in the next couple of years. And the oil guys are serious people.
Also, wait until someone legitimate, who has credibility, goes to Venezuela and does some exploration work to show that the current “proven” reserves in the country are simply bogus and do not exist: be it an actual nonexistence or economically unfeasible endeavour. That would be my bet.
Funny that, while the USA, self-pronounced, not stealing the VZ oil
Trump says that VZ will use its oil revenues to buy American products:
Energy Secretary Chris Wright said Wednesday that the U.S. will control Venezuela's oil sales indefinitely.
www.cnbc.com
I wonder how the Euros’ contemplating regarding the legality of the American actions goes and dreams of peaceful democratic transition. It is all about the people of Venezuela after all, right? Laughing.
This is a gross misinterpretation of US interests in Greenland and the North Atlantic in general, and the process ongoing between the US and Denmark.
This is what Trump’s advisors and MAGA influencers are pushing. Almost everything they (or Trump himself) push is gross misinterpretation of one thing or another. But as long as trumpets believe that their neighbours of different colour and with an accent (or not) might (or will) eat their cat and dog, this is something to watch out for. That is my point.
No one rational person debates the obvious strategic significance of Greenland. But throwing some mud at Denmark, be it the “axis” and “drugs” or “they won’t come if we really need them” in potential preparation for what is to come is obviously something to watch out for. This is off topic though.
abcnews.go.com
