Donald Trump has asked for at least $100bn (£75bn) in oil industry spending for Venezuela, but received a lukewarm response at the White House as one executive warned the South American country was currently “uninvestable”.
Bosses of the biggest US oil firms who attended the meeting acknowledged that Venezuela, sitting on vast energy reserves, represented an enticing opportunity.
But they said significant changes would be needed to make the region an attractive investment. No major financial commitments were immediately forthcoming.
Sure, invest $100bn into an unstable country chasing a dying technology at the behest of a corrupt regime. Even for oil companies, Venezuela is too hot to touch.
Not to mention there’s a solid chance the next president will basically dedicate their career to undoing Trump’s BS, so there’s no guarantee you’ll get more than a few years of revenue.
And don’t forget half the time Trump undoes his own purported industrial policy.
With the tariffs he was so inconsistent and capricious, that nobody could rely on having an edge over foreign competition long term and so nobody would dare to invest in manufacturing in the USA. If he felt like it he just cut them off from their essential foreign inputs too. Not to mention how he threatened pulling back the CHIPS Act subsidies from Intel, or how he raided Hyundai.
A month from now:
I’m working on this horrible Venezuela situation that BIDEN left me with. Such a waste of American resources but I’m going to pull that back to make America great again.
Even if Trump hangs around as a dictator there’s still no point investing in Venezuela. It’s not as if there is even a global oil shortage so why would you want to build more infrastructure.
Trump is looking at fighting a war in Venezuela, Greenland and at home. How could anybody possibly think this regime is ever going to be anything near stable?
I’ve played enough Battlefield to know that a war in a oil field is nothing at short of spectacular.
If we have another election at all
Holy crap, did you invent this idea? I’ve never heard anyone say anything like this before.
Holy crap, did you invent sarcasm? I’ve never heard anybody say anything like this before.
Judging from the anger over ICE and anti-american administration if Trump tries to stop the election there will be riots and strikes.
I lost count of the many “if x happens we’ll act” excuses…
I have yet to see any evidence that Trump doing anything would cause riots and strikes. The American people are too pacified to defend themselves.
We’ve already had a few riots.
Technically we’ve also had Jan 6th, but I know that’s not what you mean.
You think Trump is immortal?
It’s nice to be hopeful. I’m not holding my breath though.
“now is a time for healing so we are going to hold no one accountable and in a few years when the fascist are back we can do this again”
It goes beyond that. Venezuela’s oil is heavy crude(if I understood correctly) which is difficult to process and requires specialized refineries in which US oil companies have not invested in.
EDIT: See comments below for corrections and more context.
https://paulkrugman.substack.com/p/the-emperors-new-oil-wealth
Top notch information. Thanks.
It’s largely the same as Canadian and Mexican oil, so the infrastructure is very much in place.
It gives Trump an opening to pressure/annex Canada and Mexico, if Venezuela can make up the difference (which they can’t, yet).
It’s true that the infrastructure is already in place but it is important to understand that it is not simple infrastructure, and with a few exceptions, it is already pretty much fully utilized by Canadian and Mexican heavy crude/bitumen so it’s not like they can just double their capacity and start processing Venezuela too. You’re right about giving an opening to pressure Canada/Mexico though.
But it’s questionable if there’s really much upside for the US on the financial side. The opportunity to pressure is definitely there, but more pressure isn’t going to get blood out of a stone. Venezuelan oil will still have costs associated with it, and Canadian and Mexican oil is already really cheap.
The oil itself may be essentially free the way they’re stealing it with military force, but It’s not going to be cheap to build up Venezuela’s production infrastructure and it’s not going to be cheap to transport the oil stateside, and both Mexico and Canada already have all that infrastructure in place too, and already give a huge discount to the US since they have nowhere else to affordably sell or refine their oil as they have effectively no indigenous refining capacity for heavy crude and few other export options. During a few of the oil price plummets around Covid, Canadian oil (Western Canadian Select) was actually selling for negative prices, Canada was paying the US to take it off their hands and refine it for them. With global oil prices already trending relatively low, it’s going to be hard for oil from Venezuela to realistically compete with situations like that.
The most believable explanation that I’ve heard is that this is not really about directly stealing Venezuela’s oil reserves as much as it is about denying it to Russia and China, and maybe securing them in case of some future conflict. And that, I think, makes an awful lot of sense geopolitically as distasteful as I personally find the whole affair.
So: very specialized, expensive equipment in a small number of locations. What could go wrong?
While I’m not saying our oil dependency is good, calling it a dying technology is a bit silly. Even electric cars have lots of oil in them, nevermind the phone this is being typed from or my carpets or any other number of daily items. I do wonder if some of the unrest around the world these days is partially out of a fear that theres only so much oil…
An article i read states that with China and India fully investing into EV technologies, we could see oil demand peak in 2030 and:
“The tragedy is that we’re fighting over barrels that look huge on spreadsheets but shrink rapidly when confronted with physics, economics and time,” said Guy Prince, the head of energy supply research at the thinktank.
While the US is a net exporter of oil too.