Who’s got an opinion on what this does to the price of crude oil?
I was wondering the same thing.
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An opinion based on common sense, not of intellectual background on crude oil prices. I see it as a basic supply and demand with additional factors thrown, in such as cost to produce the crude oil. At one point drillers will stop drilling if oil doesn’t provide a profit due to falling prices.This will decrease supply while demand stays consistent, causing prices to rise. I ponder what the production cost is in Venezuela versus the United States. And is the oil a lower grade requiring higher refinery cost. Will they control production in Venezuela to protect the oil drillers in the United States? Who knows it’s all speculation at this point. Happy new year and stay positive.
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With an additional thought. Will this oil from Venezuela actually go to the markets that Russia has been supplying? If so, that will squeeze Russia on the war with Ukraine creating a new market for this oil, offsetting the additional supply.
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Venezuela oil is heavier, higher sulfur oil and not quality oil. Lighter, sweeter crude is better to refine
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China’s envoy was visiting Maduro earlier in the day he was snatched up. I could be off base, I doubt that oil was the main reason. The Russians and Chinese have been cozying up to Venezuela. There are various terrorist groups in that area. If I recall correctly, about 20% of drugs that end up on US soil come from Columbia to Venezuela to the US. I don’t know what it means for US oil/gas prices or pumping/drilling.
Per Time and Fox business:
Venezuela’s Oil Exports
Key Buyers
Venezuela primarily sells its oil to the following countries:
| COUNTRY | OIL IMPORT VOLUME (APPROX.) | NOTES |
|---|---|---|
| China | 600,000 barrels per day | Major buyer, crucial for energy security |
| Russia | Not specified | Engaged in energy partnerships with Venezuela |
Thank you all for your insights. Time will tell.
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This will obvious add more supply to market so expect it will if anything will decrease the price
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The oil in Venezuela is a dark heavy crude. Oil in the Permian is a light crude. Both are needed for everyday life. Jet fuels run off of heavy crude. Refineries in the Gulf will now use the heavy crude with the Permian Basin light crude to export to the world. Don’t be surprised if there is a huge spike oil and a lot of people in this forum will be getting calls from oil and gas companies with big offers for minerals and surface rights.. I predict $70 to $80 + a barrel in the next few months. Before Trump’s term ends there will be many millionaires in this forum.Trump decisions are based on profit and the American Basins. He will will not do anything to harm the American oil business. Only enhance I believe.America 1st. Drill baby drill!
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more supply means LOWER prices…..its simple economics…..its about 45 dollars now, no way its going to hit 70 or 80. Not happening.
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Fortunately, it will take years to rebuild Venezuela’s oil infrastructure.
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Venz Oil is also good because of Diesel Conversion. The Distillate side of the barrel is much more valuable to any refiner that can swing processing to make more Diesel than Gasoline.
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And do not forget but add Cuba to the list. Without Venezuelan oil its electrical grid, while already failing, will suffer even more outages. Transportation there is still almost 100% internal combustion.
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Ah, good point. Cuba is a throwback in time.
Venezuela is a poop show. The Maduro poop show was far worse than the Chavez poop show. For the entire country. But it’s been almost 2 decades of malfeasance going on there on the oil assets.
We (ConocoPhillips) got nationalized/booted out almost 20 years ago. It’s tough to just randomly lose $8B due to the VZ govt deciding they don’t like the current terms, but that’s the nature of overseas investments in semi-hostile place. I guess there is a chance that the US will try to give these assets back to the old US oil companies as compensation for past claims, which probably will incentivize oil companies to give it a shot. But it’s still pretty high risk. And it’s not like somebody just needs to go back there and turn on the lights. It’s going to take years and years of sustained investment to get their oil volumes to where they were 25 years ago (2.5mmbd). Somebody has to go back at $55WTI and decide they want to get more 10 API crude out of the ground. That may not be that enticing. It took Iraq around 15 years to triple their oil volumes, and their production went down quite a bit after the regime change before it started going up (though yeah, VZ unlikely to have the civil war/jihad aspects to deal with). This all even assumes that this topic holds our governments interest for more than a week long news cycle.
But, in short, whatever happens to VZ that could affect worldwide supply growth is going to happen far enough down the line that it will overlay all sorts of other events that we don’t know about. It’s a long term signal of a possible supply increase, that’s it. And it probably makes investment in Guyana oil production a bit more stable as less likely to be affected by territorial dispute with VZ. Lord knows.
Your mileage may vary, our friend DJT wants to make oil prices low. If this happens to be a day where he thinks about that. Which is really really really bad for the domestic oil industry. And mineral owners. Good for everybody else. So probably a net win for the country, but real bad for oil checks. It’s been this way for 25 years, if you want higher oil prices, you need a President that is trying to ban oil….y’know, like a Democrat.
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We have a lot of big projects that are launching this year 1 example is the CPV Basin Ranch. At least a good 9 mega projects are launching in the Permian alone. This is a 10 to 12 year process maybe longer with Venezuela. Great things ahead in the Permian
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Tomorrow, Jan 6th.
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Your right! If the US companies refurbish and build new facilities they will just be taken over and nationalized again.
I’m not sure why we have not learned the lessons of Vietnam, Iran, Afghanistan and more. It never ends well and never will. Remember the quote that “the military operation costs will be paid for by taking their oil”…..well that didn’t happen. We are buds with the Saudi’s who current ruler authorized the kidnapping and killing of a naturalized US citizen, who was cut up with a bone saw….all verified by the cia. Plus unless we put boots on the ground I don’t see how we can “run” the country. Msybe that’s next?
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We built what they do have, part of the reason we captured Maduro, they owe billions to American oil companies. even won a judgment in court and still haven’t been paid.