The Kobeissi Letter- Most people do not realize how much the world just changed.
In other words, in 12 hours, the US has gained control of oil reserves worth more than the entire GDP of ALL countries in the world, aside from the US and China. That’s 4 TIMES larger than the GDP of Japan.
Then there’s everything else.
If the price of crude drops far enough, Russia cannot produce at a profit. They would have to decide whether to keep producing at a loss, or stop production resulting in unemployment and recession.
So would Alberta.
And Texas.
And Oklahoma.
And Alaska.
And………..
They have to keep some of their production going, otherwise it freezes.
Trump says he has control of Venezuela, but does he really?
Trump also said he’d reduce the price of prescription drugs by 1000%.
You left out; Trump would end the Ukraine War on day one.
Well, let’s see how happy the Venezuelan people are to continue starving or welcome America with open arms? Are they still eating zoo animals?
A lot of Venezuelans were Maduro supporters, allies, employees and military types and aren’t starving and they just may determine or affect how things play out.
I’m pretty sure US-friendly investors and companies are going to take a wait and see attitude to see how things shake out before making any commitment re resource development.
And that could take years as Accomack notes below.
It will take years to get Venezuela back on the market and the only market is the US.
It must be remembered that only Commies get anywhere and that chick who won the NPP has to be a commie or she would not have won.
Trump’s plans only work if they are in place for 4-5 years. That’s doubtful.
Yeah, Maduro’s gone, but, all of this will be noise when their civil war restarts by November.
Most Venezuelan oil (approx. 600,000 bpd) currently goes to China.
https://x.com/grok/status/2007468554270986736#
Yes, to pay off Venezuela’s Belt and Road debt. The Venezuelan people get nothing.
Chevron is already in place and pulling out 80-90,000 barrels a day.
Maybe Venezuela will become the 51st State !
No more than the debtor, welfare, Canadian Nation will ever be.
More oil from Venezuela complicates the Circus Carney’s position, since it will be refined in the same refineries as Oil Sands oil.
Under Maduro and the socialist minions that suck off the teat of Maduro, the country has been a hell hole. When cooler heads and righteous leaders can fill the vacuum, there should be a reset that the world needs to pay attention to.
See San Salvidor for a good template.
Another take on Venezuelan oil:
https://x.com/piqsuite/status/2007404417159413968?s=46
This link should be reprinted under every nut-case’s commentary that Vzla crude is going to immediately flood the US market and we’ll have $40 oil in a month, and Alberta’s chance is ruined.
It’s going to take 4-10 years to regain production back to their pre year 2000 level, most of the 18k PDVSA petroleum experts who left Vzla will never return now, it’s been 22 years since they worked at Vzla wages, Vzla doesn’t have the cash to reinvest into rebuilding capacity, the rest of the non oil and gas producing citizens have no clue as to how to do it let alone run a moderately successful business in which to work towards a goal. Their military is the most top heavy in the world with nothing to show for it but a chest full of bogus medals, their government at all levels is much more involved with their day to day lives than even Canada’s multiple levels of underperforming gov’t.
None of this will be repaired “soon” and all of it will take years. It took years to ruin, it’ll take 2x years to rebuild, only this time, they’re out of money, and the experts won’t return.
They may continue to sell 80% of their 1.1MBPD oil to China, which doesn’t matter as at least it’s bringing in enough cash for the country to import food. Don’t get me started on why a country which should be growing 2-3 crops a year is actually growing less than one crop per year. That tale starts and ends with socialism applied to farming, and everyone knows how that 5 year plan works…
I disagree with everything that the posted link from Kobeissi says. I don’t think he’s visited a third world country lately, and he should know that “the US Gov’t” doesn’t sell or dictate oil prices.
uff.
A third world Country? What? Are you telling me that Chinese, Russian, and Iranian oil field experts haven’t been operating their oil infrastructure? Surely they’ve had First World oil expertise keeping the oil flowing.
I don’t know of how many folks Russia or Iran has working in the petrol business there, maybe selling military armaments is more lucrative for Russia and Iran? And we all saw how that turned out near to 2-4 AM local time today in Venezuela. (I think turning off all the lights in Caracas was a neat trick to be able to do, just like that, middle of the night during a military operation!). I think Russia sent their extra men to the front near Ukraine, when I was in Vzla in winter of 2006 I saw in Anaco, Anzoátegui (in the east of the country pop 105k, a couple hours from Barcelona on the coast) there were quite a few chinos (that’s how the locals referred to them) from China working mostly at the local Anaco gas plant, they all had the same “made in China” FR blue or red coveralls from Sinopec … and they all looked the same to me. lol…
Sinopec started divesting from Venezuela almost a decade ago for the usual reasons, the locals weren’t paying for the services Sinopec was providing, much the same as the Venzuelan gov’t didn’t pay Americans from Baker Hughes or Schlumberger and they left with a +$1 Billion debt owed to them as well. At least China will take their payments in oil received, eventually.
Venezuela was solidly in the second world for a long time, I refer to them now as third world as their results are third world, even though there were some standouts of success, but mostly things are broken now. The water infrastructure, the petrol plants near broken, their spirit near broken…
The farms are lucky to grow one crop a year. All imports are paid for in oil exports, and there isn’t enough of that to keep up with the bills.
In a few years, Atlantic Canada will share this song with Venezuela…
https://www.youtube.com/watch?v=pndhO5DcSI0
Security means more to us than oil. The oil is a nice benefit that may pay dividends (it may already be doing so; in fact, yes, yes it already is), but it wasn’t the primary concern.
Great comments by Marc. My initial thought was this would mean lower prices for AB crude. A few things though as has been touched on:
All of this oil is in Venezuela. South America. The whole place is a hot bed of commies. How long until they want to “repatriate” all the new capital investments from oil companies? Again. How long until USA re-elects some Democrat bozo that will allow that to happen? If oil was at $120/bbl some company might be willing to chance it. Maybe. US gov would almost have to bankroll all the new infrastructure and that ain’t gonna fly coming up to midterms.
Just random thoughts. happy New Year all.