Everyone says it's about the oil (including Trump), and it is, but it's a simple way to put somethign that can be seen from a couple angles.
A Kpler report from yesterday frames it as a timing issue. In the short term, Venezuelan exports are being disrupted rather than unlocked, China-bound barrels are stuck, floating storage is rising, and production could drop if the blockade holds. So short-term stress without a clean global supply loss.
Zooming out is where the story changes. Political transition and sanctions relief could allow Venezuelan output to recover in the longer term, adding supply back into an already well-supplied market and reshaping heavy sour flows.
Short-term: disruption, risk premium, tighter heavy sours
Medium: bearish if Venezuelan supply normalizes
Long-term: buyer map shifts (USGC, India, Spain back; China teapots lose access)
If everyone agrees this is "about the oil", how do you see that translating into actual market impact from here? How are traders thinking about this, are you trading the disruption, or already looking through it to the supply unlock?
Maduro's capture is "about the oil", but how will it actually play out?
byu/Practical_Signal2318 inoil
Posted by Practical_Signal2318
6 Comments
Nothing will happen. Just like drill baby drill never happened.
I think your short/medium/long term guesses are pointed in the right direction.
The biggest issues don’t have much to do with the oil but more with the larger questions of long term political and economic stability, which is more political than economic.
Wait and see is the operative idea just now, I think.
In order to increase production in any meaningful way in Venezuela there needs to be huge capital investments. Their reserves are composed of mostly extremely heavy crude that is technically challenging and economically costly to both produce and refine, nothing like the light crude we see in the unconventional fields in the US. Even with opening the door the US companies, why would they want to invest that kind of capital at sub $60/bbl oil? I don’t know what will happen because this situation is so unpredictable, but it’s a lot more complicated than just opening the taps.
Oil is only a part of it. China, Cuba and Russia are a part of it.
Who in their right mind would take long term investment advice from Dementia Don? He can’t event make casinos profitable?
I don’t believe it’s mostly about oil. Why go to all this trouble when oil is so cheap now.
I think oil is the cover story for a larger geopolitical play.