My Guess as to What Venezuelan Oil Means to the USA

[Terrel L. Shields]

Venezuelan reserves are the largest proven reserves in the world but decades of neglect has damaged the facilities for transporting this oil to market. And Venezuela is a member of OPEC. But it will take years for this oil to be developed economically and environmentally in a sane manner. But I think within a year, assuming some of the companies return who were kicked out - like Exxon-Mobil- it will reduce or limit the price of crude oil. But because domestic production is necessary, and domestic refining is necessary, the price of oil will hover around the basic cost of developing any oil reserve. That means $50-60 per barrel. That's cheap considering inflation in the past 30 years.

The problem is that it will embolden states like Colorado, the left coast, and New England to abolish all drilling domestically as well as trying to eliminate refining in their states. This could lead to more refineries being built out of the country and importing finished product. That's not necessarily a good thing. Meanwhile it puts Canada in a pickle. The thick tar sands oils will be even cheaper, produce less tax revenue, and the current government of Canada is rapidly destroying their domestic oil industry as it is.

In other words, it is business as usual. Oil prices will remain in a race dominated by swings that relate as much to geopolitical machinations as it does to the economics of producing and refining oil per se.

 

[Tom D]

They say up to $200 billion to rehab their oil industry. But they were producing over 3,000,000+ barrels a day in their prime. Currently, their oil has been going to cuba, china, russia, etc.
So in effect we can embargo those nations.

 

[J Grant]

I do not see how it will benefit America. It will cost us troops, and $ and destabilize the region. It might or might not benefit Venezuela. I bet DT will awardg fat government contracts to his cronies to rebuild there, as our own debt grows. If it succeeds, billions will flow to the oil companies. The private companies sell internationally and at market prices.

It has been forecast to damage the environment - oil spills, methane gas, and more deforestation. You hate conserving the environment, right? So it's all good.

 

[Terrel L. Shields]

Currently, their oil has been going to cuba, china, russia, etc.
So in effect we can embargo those nations.

Better to embargo them than to let them control the oil and country then embargo us. Monroe Doctrine.

I do not see how it will benefit America. It will cost us troops, and $ and destabilize the region.

How could it destabilize it more than it is already? The people in Venezuela are starving to death as food is hit and miss. And Maduro was emptying their prisons and exporting here - like the Tren de Aragua gang that literally originiated in the prison system of Venezuela. Prior to Chavez they were a major exporter, often exporting to Louisiana where they owned Citgo refineries that specialized in refining their heavy crude oils for US consumption. The unconventional horizontal drilling in the US has reduced our demand for oil but states like California are basically running the refiners out of the state. California will be importing REFINED product soon and lots of it. They will have no choice for a lack of refineries in the state.

Regardless how and where the oil is sold, the more oil there is the lower the price will remain for longer. Not that personally if oil was in short supply and we see $200 a barrel oil I would easily see my royalty checks quadruple. But it also would hurt a lot of people. I am willing to forego a windfall so that my family can afford to drive to work, pay their bills etc.

The cost of the necessary repairs will come from the product itself provided a few companies are willing to return, under license, to Venezuela and pick up where they left off when they were run out of the country and had their assets stolen by the Chavez government.

 

[J Grant]

Better to embargo them than to let them control the oil and country then embargo us. Monroe Doctrine.

How could it destabilize it more than it is already? The people in Venezuela are starving to death as food is hit and miss. And Maduro was emptying their prisons and exporting here - like the Tren de Aragua gang that literally originiated in the prison system of Venezuela. Prior to Chavez they were a major exporter, often exporting to Louisiana where they owned Citgo refineries that specialized in refining their heavy crude oils for US consumption. The unconventional horizontal drilling in the US has reduced our demand for oil but states like California are basically running the refiners out of the state. California will be importing REFINED product soon and lots of it. They will have no choice for a lack of refineries in the state.

Regardless how and where the oil is sold, the more oil there is the lower the price will remain for longer. Not that personally if oil was in short supply and we see $200 a barrel oil I would easily see my royalty checks quadruple. But it also would hurt a lot of people. I am willing to forego a windfall so that my family can afford to drive to work, pay their bills etc.

The cost of the necessary repairs will come from the product itself provided a few companies are willing to return, under license, to Venezuela and pick up where they left off when they were run out of the country and had their assets stolen by the Chavez government.

Yup like Mexico will pay for the wall. How did that work out?

It was up to the people of Venexuala to right their own govt problems. The only good it does is hold off some Russian or Chinese influence there, but Russia is already punishing Ukraine for Trump's aggression, which ruffles Putin's feathers a tiny bit. Trump has mostly rolled over for Putin - let's see what evolves from Trump's never-ending chaos.

I'd like to see him tackle domestic problems inlcuding paying down the debt.

 

[Charles West]

We seized a fifth oil tanker, the oil headed for a salt mine near you. I wonder how many it will take to top off the strategic reserve?

 

[Charles West]

Yup like Mexico will pay for the wall. How did that work out?

It was up to the people of Venexuala to right their own govt problems. The only good it does is hold off some Russian or Chinese influence there, but Russia is already punishing Ukraine for Trump's aggression, which ruffles Putin's feathers a tiny bit. Trump has mostly rolled over for Putin - let's see what evolves from Trump's never-ending chaos.

I'd like to see him tackle domestic problems inlcuding paying down the debt.

How are we going to pay down debt when we have the American Rescue Plan and the Inflation Reduction Act still up our collective whazoo's? Less whining, more awareness, please.

 

[Terrel L. Shields]

Yup like Mexico will pay for the wall. How did that work out?

Venezuela depended upon the US oil industry to fund the entire country for decades. They demanded and got a better deal in the early 60s when OPEC flexed its muscles. Chavez nationalized the oil, and the natives were incapable of maintaining the existing infrastructure. They allowed Chevron back in because they had to get outside help or cease production entirely. But even then, they did not restore the wells to Chevron. And that money is going to US controlled banks to repay Chevron's billions that were taken from them. Only a small part of the oil was actually controlled by Venezuela - or Maduro in reality. He was selling that oil to Russia and China who was reselling it to bypass sanctions.

Companies are weighing the odds that they can recoup their investment if they return to Venezuela. If the US can work with the new future government well, then these companies can profit from being there, the country can earn royalty revenue that will benefit the people, and in doing so, increase the oil in the world that will keep prices lower for everyone. As for the wall, it clearly reduces illegal immigration and that means the wall is paying for itself.

 

[J Grant]

How are we going to pay down debt when we have the American Rescue Plan and the Inflation Reduction Act still up our collective whazoo's? Less whining, more awareness, please.

By having a president and plan for it - our debt was already high when Biden took office and DT in his first term added a whopping 7 trillion to it.

 

[Terrel L. Shields]

dded a whopping 7 trillion to it.

a mere 15%... and Biden jacked our jaw with insane inflation we had not seen since the 80s.