Canada currently sends 600k BPD to the Gulf.
They are in a tough spot, the tmx has only 100k BPD excess capacity at max. Pipelines to the Midwest are at capacity.
Trump knows these things and doesn't really seem to like Canada.
They currently ship 80k BPD by rail. They'd have to 6x the amount moved by rail to take up the excess supply.
And I think the screws could be tightened more. The energy sec has said we are going to get cheap oil and some companies are going to go under. I think they are looking to utilize Canada's limited market access to make sure Canadian oil gets hit first.
I'm not going to shy away from Canada but I'm going to need a bigger discount and only look at companies with really good balance sheets. Personally I probably will look to buy in after q1/q2 2026 when they should be realizing poor oil prices on the reports 👍
50m barrels/quarter from Venezuela to the Gulf would replace Canadian oil
byu/DonJuansCrow inoil
Posted by DonJuansCrow
4 Comments
Venezuela was producing around 65m barrels a year, or 16m per quarter. It is unlikely they will be producing 50m a quarter anytime soon–it took 10 years and many billions of dollars in outside investment to get Iraq’s oil production back to where it was before it invaded Kuwait in 1990, after the U.S. occupied Iraq in 2003.
By all reports, Venezuela’s oil infrastructure is in much worse condition than Iraq’s, some facilities are so badly decayed they likely cannot actually be salvaged and would need torn down and rebuilt. There’s even significant reservoir damage that won’t be trivial to work around.
Venezuela could eventually be a major producer, but it will require at least a decade of work and someone, outside of Venezuela, is going to have to write very big checks to invest in this project.
This should be good for Canada, force it to diversify. We have a decade.
Really depends on the money.
Is private company going to step in? Then it will take a few years to make sure the US Marines are going to protect their investments.
If the US taxpayers open their checkbook, and real companies take advantage, then it can be 2-3 years.
If the US taxpayers has no idea where the money is going, then these companies will pump as much money out of this deal as possible.
A few real companies can be effective and timely. If a company like the one hired to restore Puerto Rico’s electricity gets involved, well, then never.
The cynical will say knushner companies will take billions of dollars and nothing will be pumped. Most just a threat to bend over the Canadians.
What’s the profit on the free oil on the tankers? We could just keep confiscating the free oil on tankers from around the world and shut down all the oil rigs in America?