300 billions barrels of oil (largest in the world), natural gas and coal but broke and it’s going to get worse:
The United States will reimpose sanctions on Venezuela’s oil and gas sector in response to the Maduro government’s failure to allow “an inclusive and competitive election” to take place.
Because the Venezuelan government had the bad form to expropriate holdings of US oil companies? Why does a small group in Florida, that is still fighting the civil war it lost 65 years ago, have an outsized influence on US elections and government policy? Why was the US financing a terror campaign against the government in Nicaragua, after the Sandinistas had the bad form to unhorse a US backed, corrupt, dictator?
Chavez did offer compensation. Some other companies accepted the compensation and called it a day. The US oil companies said “not enough”.
What Steve said, but also the simple fact that Venezuelan crude is mostly heavy sour, and that combines economically very nicely with many USA crudes in making for efficient refining. A lot of the major refiners built refineries using that mix, and look back with nostalgia at the good old days with those Venezuelan imports. I know a significant amount of “protected free speech” of SCOTUS defined corporate “persons” doing refining goes to trying to get that crude back into the mix.
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(my oil/gas holdings [micro % of output of a few wells] are mostly of Wyoming and Colorado sour crudes that went up in price when Venezuela went off-line… and the majority holders spend some of “our” income entertaining Congresscritters)
Venezuelan sour heavy crude has a market price lower than coal in some instances. It is closer to bitumen or asphalt (WITH HIGH H2S!) than the “oil” most of us associate with “crude”
Apologies for the quality of that image. I pulled the first available.
Nonetheless, a significant portion of the gulf infrastructure was built around processing it (and equivalents).
Although crude from Venezuela is considered “Heavy” and “Sour”, it also varies significantly by region within the field. Here is an example of variation within a single reservoir:
Distance Caracas to Houston - 2264 miles
Distance Calgary to Houston - 1758 miles
Yes, the transport method is different (pipeline vs. ship), but it’s not just a matter of straight-line distance.
I’m sure the bean counters can work out the most cost-effective way from each region of the fields.
The US puts off using reserves. Besides VZ oil is heavy sour crude. Not sure the world has enough refinery capacity at the moment for it.
VZ oil is a strategic second helping for the US later on. Maduro will be long gone.
The US does not guarantee dictators will survive. There has to be something more of value to let them live. Saudi Arabia case in point. Cheaper oil on the surface. Using it up now brings down Arab power later as the oil dwindles. The Saudi wealth fund has to be the worst managed money on the planet.
Well perhaps not. China’s Xi might have them beat.
As the Captain implied but, being his congenial self, did not bluntly assert, the cost of the journey by water transport (super tankers!) is tiny compared to the cost by land (pipe if you are insanely lucky to have such, and the cartage is steep, by rail is nastier, and by truck is fuggidaboudit!
[What was that irrelevant doggerl about sea vs land transport? “One if by land and two if by sea.” And the sneaky Brits went by sea and then got their noses punched. Choices are nice.]
