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2025 U.S. - Venezuela conflict


So this was his take 9 days ago.


Part two is today.

Looks bleak for Venezuela if that outlook is accurate.
 
Colin Parkinson said:
Is a government run by María Corina Machado or Edmundo González Urrutia a puppet regime? Considering they were either barred from running or disenfranchised by the current regime.
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We would have to see that actually happen and on what terms to gauge that- but the U.S. doesn’t seem inclined to go that way. I can only go by what we’re actually seeing happening. At present, that’s Trump describing Maduro’s VP as being cooperative in U.S. goals, of course with the explicit threat of further attacks hanging over her.
 
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brihard said:
Any meaningful improvement in Venezuela's net oil exports will probably be a few years. Their infrastructure is shambolic. We do have some time.

The big change will be that rather than selling a bunch of it under the table to shadow fleets at probably a fairly steep discount, we'll probably simply see all of Venezuela's exports diverted to the open market but under control of US companies. Don't forget that Chevron already legally exports some Venezuelan oil under an arrangement between the two countries.

I fully expect no meaningful amount of that money will go back to the Venezuelans. Trump will make the most out of the purported claim to Venezuela's oil wealth to offset what was nationalized decades ago. I fully expect the US will also lay claim to an entitlement to the value of the profits they will argue they would have made since then too.
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For now they don’t need to improve the infrastructure. Instead of supplying China, etc just redirect it to refineries in Texas that are operating below capacity.
 
Nvlgzr said:
For now they don’t need to improve the infrastructure. Instead of supplying China, etc just redirect it to refineries in Texas that are operating below capacity.
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1m bpd of Alberta oil they suddenly no longer need, and that number is only going to go up.
 
Nvlgzr said:
For now they don’t need to improve the infrastructure. Instead of supplying China, etc just redirect it to refineries in Texas that are operating below capacity.
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Are any of the refineries in Texas configured for this grade of heavy oil? Raw crude isn’t universally substitutable; there are different grades and chemistries.
 
Remius said:

So this was his take 9 days ago.


Part two is today.

Looks bleak for Venezuela if that outlook is accurate.
Click to expand...
Was just about to post that. Does help people wrap their head around the possible consequence of the move by Trump. Not sure if I agree with the bleakness of his predictions though.
 
Altair said:
1m bpd of Alberta oil they suddenly no longer need, and that number is only going to go up.
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Eventually - once the infrastructure's fixed up at the VEN end (and I suspect that'll need a lotta work). Also, from what little I know, the AB oil is handy because it's supplying central-US plants, while the VEN oil would more likely end up hitting Gulf processing spots. I'd love to hear more from those more in the oil know than me, though.
 
brihard said:
Are any of the refineries in Texas configured for this grade of heavy oil? Raw crude isn’t universally substitutable; there are different grades and chemistries.
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The crude of venezuela and the crude from alberta are remarkably similiar. So yes.
 
Altair said:
They are kind of right, kind of wrong. The USA only needs so much heavy crude, so even if it's going to the gulf coast, thats still cutting into Canadian Market share.
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But Canadian crude doesn’t go to the Gulf and it doesn’t look like the refineries in the Midwest that take our oil are hooked up to pipelines from the gulf that could substitute it? Correct me if I’m wrong.
 
brihard said:
But Canadian crude doesn’t go to the Gulf and it doesn’t look like the refineries in the Midwest that take our oil are hooked up to pipelines from the gulf that could substitute it? Correct me if I’m wrong.
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Not hooked up, yet. How long would it take the Trump administration to build such a pipeline? Or simply move VEN oil northward by rail?
 
brihard said:
But Canadian crude doesn’t go to the Gulf and it doesn’t look like the refineries in the Midwest that take our oil are hooked up to pipelines from the gulf that could substitute it? Correct me if I’m wrong.
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“The bitumen in the Orinoco Belt is identical to the bitumen in Alberta. Identical,” said chemical engineer Lino Carrillo. He should know, having worked for 22 years at Venezuela’s state oil company, PDVSA, followed by years in Fort McMurray.
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Canadian oil replaces Venezuelan​

Venezuelan crude had long been refined partly in the U.S., where many Gulf Coast and Midwestern refineries had retooled to handle the bitumen- and sulfur-heavy Orinoco crude. As Venezuela’s production began to shrink, Canadian oil began to fill the gap.

“Historically, Venezuela was one of the largest suppliers alongside Mexican Maya, another heavy crude grade, of these heavy sour barrels to U.S. Gulf Coast refineries,” said Rory Johnston, an oil market analyst who teaches at the University of Toronto and is the founder of market research firm Commodity Context. “Canada has actually been a relatively recent entrant to this U.S. Gulf Coast market.”

As Canadian production grew in the first decade of the century, Johnston said, Canada first satiated the closer Midwest refineries, then spilled over into the Gulf refineries and finally ended up producing so much oil that some of what it sent to the Gulf was being re-exported out of the U.S. entirely.

At that point, Canada became a victim of its own success, and was forced to accept steep price differentials (markdowns) by refineries that were clearly enjoying a buyer’s market.

Venezuelan oil disappeared from the scene entirely, and pipelines that once flowed north from the Gulf were reversed to bring Canadian oil south, a process that has continued almost to the present day.
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Venezuelan oil would have easy access to Gulf refineries​

The strong similarities between Venezuelan and Canadian crude, as well as the ease with which tankers could move the crude between Venezuelan ports and refineries on the U.S. Gulf Coast, suggest that if Venezuelan crude production ever came back — and sanctions went away — Orinoco heavy crude would likely be able to undercut Canadian crude at refineries in Texas and Louisiana.

“The most natural market for Venezuelan barrels are the refineries actually sitting along the U.S. Gulf Coast,” Johnston said. “They won't need additional pipelines or anything else. Basically, you'll just pull a tanker up, unload and then you're competing directly with Canadian barrels.”
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Enjoy the read.
 
Haggis said:
Not hooked up, yet. How long would it take the Trump administration to build such a pipeline? Or simply move VEN oil northward by rail?
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Both those options are big risks with a lot of logistic problems through multiple countries where a lot could get stolen, when they could simply export it via tankers.
 
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