‘Vast wealth Trump imagines’ from Venezuelan oil doesn’t exist: Krugman
https://thehill.com/homenews/administration/5679642-krugman-venezuela-oil-reserves/?utm_social_post_id=646640411&utm_social_handle_id=7533944086&fbclid=Iwb21leAPNOvNleHRuA2FlbQIxMQBzcnRjBmFwcF9pZAwzNTA2ODU1MzE3MjgAAR50zPTrFz_nPXfXXPVgD4uOgCoEcqQsPzF1sGJ0vPBR9IoV6GJbYEoQ3axF_Q_aem_oKDAHKXK_bsmwH2Ejwjldg
Posted by kootles10
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From the article:
Economist Paul Krugman on Wednesday said there’s no wealth to be gained after President Trump said that U.S. oil companies would take control of Venezuela’s oil production following the ousting of the country’s president, Nicolás Maduro.
“Donald Trump’s Venezuela venture is a very different story,” Krugman wrote on his Substack. “During his triumphalist press conference after the abduction of Nicolás Maduro, Trump never used the word ‘democracy.’ He did, however, say ‘oil’ 27 times, declaring, ‘We’re going to take back the oil that, frankly, we should have taken back a long time ago.’”
“Even so, whatever it is we’re doing in Venezuela isn’t really a war for oil,” Krugman continued. “It is, instead, a war for oil fantasies. The vast wealth Trump imagines is waiting there to be taken doesn’t exist.”
Economist Paul Krugman on Wednesday said there’s no wealth to be gained after President Trump said that U.S. oil companies would take control of Venezuela’s oil production following the ousting of the country’s president, Nicolás Maduro.
“Donald Trump’s Venezuela venture is a very different story,” Krugman wrote on his Substack. “During his triumphalist press conference after the abduction of Nicolás Maduro, Trump never used the word ‘democracy.’ He did, however, say ‘oil’ 27 times, declaring, ‘We’re going to take back the oil that, frankly, we should have taken back a long time ago.’”
“Even so, whatever it is we’re doing in Venezuela isn’t really a war for oil,” Krugman continued. “It is, instead, a war for oil fantasies. The vast wealth Trump imagines is waiting there to be taken doesn’t exist.”
Krugman argued that while Venezuela has the world’s largest known oil reserves, it was because heavy oil was reclassified as “proved” oil. He cited economist Torsten Slok, who previously wrote that most of the oil “is extra-heavy, which has low recovery and a high cost to produce.”
“This suggests that Venezuela’s claims to have immense usable oil reserves were politically motivated hype,” Krugman continued.
Krugman added the oil is cheap because of the increased supply due to fracking, with a break-even price at $62 a barrel. This would not be enough for oil companies to make a profit.
“In short, Trump’s belief that he has captured a lucrative prize in Venezuela’s oil fields would be an unrealistic fantasy even if he really were in control of a nation that is, in practice, still controlled by the same thugs who controlled it before Maduro was abducted,” Krugman concluded.
Only this administration would choose to be about taking oil when the price is near historic lows after inflation instead of actually rebuilding freedom there. Absolutely stunning intelligence.
I mean, there is vast economic and geopolitical wealth in Venezuela. The issue is creating the economic environment where the US captures the rents from the wealth. Tapping the natural resource wealth is going to require a ton of human and physical capital for decades.
In a country that is highlighted by instability. Including what’s gonna happen over the course of the next 60 days.
Krugman is a Nobel winning economist, who has embraced populism by staking themselves to way too simple positions. Shame.
Dick Cheney and his cohorts in fiscal fantasy maintained that Iraqi oil would finance the whole war, and we would even make a profit. He also predicted that the Iraqis would welcome us with open arms and cooperate fully, so fully that he dismissed (didn’t lock up) Saddam’s private army. Heck, these folks will be so grateful for their freedom that they will hop right to establishing a peaceful government that will be friendly to the US.
It’s almost like the GOP is high on its own propaganda supply and actually believe what they are saying. They project their own values/thoughts/desires onto people in an entirely different country/culture and anticipate it will work out. It never does; and they never learn. This is just another inflationary money pit that will kill innocent people and destabilize a whole region. An extra bonus will be the terrorists it will inspire.
AND oil is global commodity whose prices are determined much more by demand. In recent years the Saudis in particular have pumped more pissinh off the OPEC + group that was TRYING to restrict flow and increase prices.
MBS needs cash for his big city in the desert and said fuck it let’s make money- and global slowdown has lowered demand.
NOT TRUMP. Us will see nickel ZERO from Venezuela
In short, it takes a lot of resources to convert heavy sour crude into anything useful other than diesel fuel. It would take close to a decade to modernize Valenzuela aged oil infrastructure in that time a large part of the world will have largely moved on from fossil fuels.
While toppling Madura’s regime was a good thing. Going after their oil will end up a nothing burger and won’t bring down the US’s fuel prices.
In order to get the vast majority of the oil a massive amount of money is going to have to be spent on the infrastructure. I’m surprised they get any oil at all. After Chavis nationalized the oil fields and expelled the major oil companies maintenance and upkeep went down hill fast.
It’s going to take billions in investments to get the fields back to where they were. Mango Mussolini was obviously told this by his oil buddy oligarchs which is why he had to float that by the public.
How much of this was about cutting off China, today and tomorrow?
In 2025, Venezuela supplies about 5% of China’s imported oil. Perhaps the number would have been higher if Venezuela could have supplied more.
Allies are better than annexations.
Words: They are not the same as the ones that are the same as the ones that are the ones that are the most popular in the world and the ones that are the most influential in the world and the
It sounds like he’s being kind of biased and dishonest here.
Why would the US want heavy oil? Because most US refineries are designed to process heavy oil. Most of our refining infrastructure is for the type of oil that Venezuela has.
It’s a weird situation because most of the oil we extract from the ground in Alaska is largely lighter oil. So we end up processing Canada’s oil which is heavier.
This sub is still citing Krugman? Yikes…
On topic, someone is currently making money extracting and selling Venezuelan oil. Someone is currently making money refining it.
How does an economist propose that obvious commercial activity is not occurring?
Krugman still looking at kiddie porn? [https://thehill.com/homenews/media/477482-paul-krugman-my-computer-was-hacked-to-download-child-pornography/](https://thehill.com/homenews/media/477482-paul-krugman-my-computer-was-hacked-to-download-child-pornography/)
There are different grades of oil. I’ve heard American shale described as “champagne” because it’s clean and requires little preprocessing to convert into fuel.
Venezuela oil is coffee grounds. And the extraction infrastructure is terrible. The investment required in years and millions of dollars is substantial. Trump’s understanding of the oil industry is as thin and stupid as everything else he sticks his grubby little fingers into.
I’m just glad we avoided Hillary and her emails, and then Kamala with her experience and reasoning. You know how “crazy” those women would have been compared to this “stable genius”
Bold of Krugman to assume that Trump did any sort of cost-benefit analysis.
This has little to do with oil, and mostly Trump sending a message to the world that the USA is no longer a modern and civilized nation, and he’s in charge.
Venezuela’s oil is extremely valuable due to holding the world’s largest proven reserves (over 300 billion barrels).
**Why It’s Valuable:**
* **Vast Reserves:** Venezuela has more proven oil reserves than any other country, estimated at around 303 billion barrels.
* **Refinery Fit:** Its extra-heavy crude is perfect for specialized U.S. refineries designed to process dense, sour oil into gasoline and diesel.
* **Strategic Importance:** Access to this oil is a significant geopolitical and economic prize, potentially reducing reliance on other suppliers and fueling U.S. reindustrialization