U.S. Energy Secretary Chris Wright said on Thursday the U.S. is getting a 30% higher price for Venezuelan crude oil than Venezuela got before U.S. special forces captured President Nicolas Maduro this month.
www.reuters.com
US selling Venezuelan oil vs Venezuela selling Venezuelan oil
The same oil is selling for 30% more than it did before the removal of Maduro and the seizure of the Shadow Fleet.
The supply of sanctioned oil from Russia and Iran allowed Asian, largely Chinese, refineries to demand the heavier Venezuelan oil be sold at a deeper discount.
The Venezuelan oil had been selling at Brent minus 14 USD per barrel.
Brent had been selling at about 60 USD per barrel so Venezuelan was selling at about 45 USD per barrel
WTI was 60 and Albertan WCS was, and is about the 45 USD mark as well.
So a couple of things have happened.
The US has more oil to sell at a 30% mark up. Competing with its supply of Albertan oil. Driving down the value of Albertan oil.
The US owns more of the oil supply giving it greater control over the oil supply.
Concurrently the actions against the globall shadow fleet is reducing China's supply and reducing Russian and Iranian revenues making them go broke faster and curtailing foreign adventures eventually.
Meanwhile China has to pay more for its oil driving costs up by 30%.
This too will impact China's balance-sheets restricting their ability to act.
And thus China's great interest in going green.
And Canada's interest in helping them.
Will we be selling them greener oil?
If the baseline is 45 USD per barrel to the US and that allows a modest profit / break-even,
And if the market value is 60 USD per barrel,
Can we get "greener" oil to market directly for less than an additional 15 USD per barrel?
Can we build a pipeline and carbon capture system for 10 USD per barrel?
Pathways CCS is assumed to be somewhere around 20 BUSD
The pipeline I will assume about something similar for another 20 BUSD
Add in another 10 BUSD for contingency and assume a 50 BUSD price tag.
50 BUSD cost
10 USD per barrel
5 Billion barrels
1 Million barrels per day
5000 days
14 years
But there is a knock on effect demonstrated by the TMX pipeline
That additional advantage of having other markets puts pressure on the supply to the US and increases the price of the WCS to the US.
Let's say that it only adds 5 USD per barrel
There are 4 Million barrels per day flowing to the US
20 Million USD per day
7.3 Billion USD per year
Applied to the 50 BUSD project cost that reduces the payback by about 7 years, effectively cutting the payback in half.
Net Zero for 2050, or 25 years from now, even if the market dried up completely in 2050 that would still leave 15 years or so of a revenue stream.
...
If I have my arithmetic right.
....
US secures Venezuela and encourages shutting down the Shadow Fleet (it isn't just the US in the game -
Berlin has confiscated a tanker, believed to be part of Russia's so-called "shadow fleet," according to a German news magazine report. The aging vessel was found floating off the country's northern coast in January.
www.dw.com
Germany this week rejected a Russian-linked oil tanker from entering its territorial waters, Bloomberg reports
swedenherald.com
US revenues rise
Russian and Iranian revenues fall
Chinese costs rise
Canadian revenues fall if nothing is done
Canadian revenues rise if new pipelines are built, with or without Carbon Capture.
www.scmp.com
thaihut.org
www.hydrogeninsight.com
