“Big Oil” is worried about spending insane amounts on infrastructure for a poor and potentially time limited return.
Bozihthecalm on
What, you mean they don’t want to spending potentially hundreds of billions if not trillions of dollars investing into a market with a completely unstable regime that might just nationalize those investments at any moment. They don’t want to invest into a market that is at the complete mercy of other nations refining resources and much like the US can just impose sanctions and obliterate said market?
No no, orange man said they were 300% going to invest.
Any_Perception_2560 on
Leaving aside broader environmental impacts, moral, US political or geopolitical implications.
Oil is fungible so more oil f will increase supply and reduce the price, or cause other places to drop production and stabilize the price.
Shale oil from the US requires a certain price point to be profitable. Will the addition of Venezuelan oil cause a long term increase in output, and perhaps a drop in price below what US oil companies require to be profitable on shale oil?
How will that fly with workers who are working on energy extraction in the US? How will that work for the trade deficit. In the case of a Taiwan war how will this Venezuelan oil supply serve the US.
Big_Wave9732 on
Why would they willing and efficiently participate in an activity that will increase the supply and hinder the profitability of their other assets?
Trump’s goal is counter to the oil industries financial interests, and as of yet he’s too stupid to grasp that.
Pygmy_Nuthatch on
Trump announced that the new Administration was sending 50,000 barrels of oil which will be controlled and sold by him.
Trump sees the tariff party is coming to an end, Congress is waking up, and he needs a personal slush fund to keep doing whatever crazy bs he wants to do with no oversight. This is also why he wants a 50% increase in the military budget. He sees himself as having 100% control of the military, so he is in effect requesting $1.5T for himself for his last two years in office.
7 Comments
Venezuelan oil is called Orinoco Heavy. It is difficult to pump and refine. By the time anyone got set up, Trump would be out of office.
It’s a conundrum
Shipping in the Red Sea hasn’t even come close to returning to normal.
Reasonable people can disagree as to the probability of a similar disruption in the Persian Gulf, but the possibility is absolutely there.
Big oil, of course, has to assume that sea lanes will remain open, but that’s not actually something we can perfectly count on.
Once bitten twice shy
Very similar to Iraq where most American companies had left within about 10 years and had sold at around break even/a small loss to Chinese and Russian companies who continue to develop the fields today. [link](https://iraqieconomists.net/en/2017/01/27/how-exxon-under-rex-tillerson-won-iraqi-oil-fields-and-nearly-lost-iraq-by-missy-ryan-and-steven-mufson/)
China has some kind of involvement in 2/3 of all Iraqi oil production today. [link](https://www.clingendael.org/publication/china-iraq)
“Big Oil” is worried about spending insane amounts on infrastructure for a poor and potentially time limited return.
What, you mean they don’t want to spending potentially hundreds of billions if not trillions of dollars investing into a market with a completely unstable regime that might just nationalize those investments at any moment. They don’t want to invest into a market that is at the complete mercy of other nations refining resources and much like the US can just impose sanctions and obliterate said market?
No no, orange man said they were 300% going to invest.
Leaving aside broader environmental impacts, moral, US political or geopolitical implications.
Oil is fungible so more oil f will increase supply and reduce the price, or cause other places to drop production and stabilize the price.
Shale oil from the US requires a certain price point to be profitable. Will the addition of Venezuelan oil cause a long term increase in output, and perhaps a drop in price below what US oil companies require to be profitable on shale oil?
How will that fly with workers who are working on energy extraction in the US? How will that work for the trade deficit. In the case of a Taiwan war how will this Venezuelan oil supply serve the US.
Why would they willing and efficiently participate in an activity that will increase the supply and hinder the profitability of their other assets?
Trump’s goal is counter to the oil industries financial interests, and as of yet he’s too stupid to grasp that.
Trump announced that the new Administration was sending 50,000 barrels of oil which will be controlled and sold by him.
Trump sees the tariff party is coming to an end, Congress is waking up, and he needs a personal slush fund to keep doing whatever crazy bs he wants to do with no oversight. This is also why he wants a 50% increase in the military budget. He sees himself as having 100% control of the military, so he is in effect requesting $1.5T for himself for his last two years in office.