US refineries stand ready to capitalize on Donald Trump's plan to revive Venezuela's struggling oil industry. As the US continues to import heavy crude from Canada, Colombia, and Mexico, securing a steady supply of cheap Venezuelan oil could prove beneficial for several reasons.
Venezuelan crude is particularly dense and sticky, making it more challenging to refine into gasoline, diesel, jet fuel, and chemicals feedstock. This unique characteristic makes the high-sulphur crude an attractive option for US refineries, which were built to process such heavy oil. The industry's demand for cheap energy to drive "reindustrialisation" could be satisfied by tapping into Venezuela's reserves.
The current import of Venezuelan crude is meager, with only 135,000 barrels per day. However, this represents a significant opportunity for the US refineries to boost production and secure a vital source of revenue. According to analysts at Energy Aspects, an additional one million barrels per day could divert Venezuela's cheaper heavy oil exports away from China, which has absorbed most of the country's crude since the US imposed sanctions on its exports.
The Trump administration's gamble may seem long-term, but it carries significant risks. Returning Venezuela's crude production to 3m barrels a day would require substantial investment and time. According to Rystad Energy, this could cost $185 billion over 16 years.
International oil companies will be cautious about investing in Venezuela unless they can guarantee the stability of the country's systems and its investment climate for international players. This means that significant capital – estimated at $30-35 billion – would need to be committed over the next two to three years to make this scenario plausible.
The global oil market has largely remained unaffected by Trump's plan, with international benchmark prices barely budging. However, this lack of immediate reaction could be a sign of cautious optimism from major players. While it remains unlikely that Venezuela's oil production will rebound rapidly in the short term, the prospect of securing cheap energy and reducing reliance on more expensive imports is a tempting one for the US refineries.
At least some major international oil companies appear to have taken Trump's plan on board, with Chevron and Exxon Mobil shares rising by over 3% and 6%, respectively. However, it remains to be seen how this will translate into tangible investment in Venezuela's struggling oil industry.
Venezuelan crude is particularly dense and sticky, making it more challenging to refine into gasoline, diesel, jet fuel, and chemicals feedstock. This unique characteristic makes the high-sulphur crude an attractive option for US refineries, which were built to process such heavy oil. The industry's demand for cheap energy to drive "reindustrialisation" could be satisfied by tapping into Venezuela's reserves.
The current import of Venezuelan crude is meager, with only 135,000 barrels per day. However, this represents a significant opportunity for the US refineries to boost production and secure a vital source of revenue. According to analysts at Energy Aspects, an additional one million barrels per day could divert Venezuela's cheaper heavy oil exports away from China, which has absorbed most of the country's crude since the US imposed sanctions on its exports.
The Trump administration's gamble may seem long-term, but it carries significant risks. Returning Venezuela's crude production to 3m barrels a day would require substantial investment and time. According to Rystad Energy, this could cost $185 billion over 16 years.
International oil companies will be cautious about investing in Venezuela unless they can guarantee the stability of the country's systems and its investment climate for international players. This means that significant capital – estimated at $30-35 billion – would need to be committed over the next two to three years to make this scenario plausible.
The global oil market has largely remained unaffected by Trump's plan, with international benchmark prices barely budging. However, this lack of immediate reaction could be a sign of cautious optimism from major players. While it remains unlikely that Venezuela's oil production will rebound rapidly in the short term, the prospect of securing cheap energy and reducing reliance on more expensive imports is a tempting one for the US refineries.
At least some major international oil companies appear to have taken Trump's plan on board, with Chevron and Exxon Mobil shares rising by over 3% and 6%, respectively. However, it remains to be seen how this will translate into tangible investment in Venezuela's struggling oil industry.
like who knew that could be a thing?! so according to the article, us refineries r gonna capitalize on cheap venezuelan oil 
and it cud be a game changer for them, but its also super risky 
cuz u need 185 BILLION DOLLARS over 16 yrs to get back to 3m barrels a day lol what even is that?! 
and china's like "nah bruh" and not buying venezuelan oil anymore 
anywayz i'm lowkey hyped for chevron and exxon mobil cuz their stocks r rising and it means they might invest in venezuela 
fingers crossed it all works out tho!
I mean come on, $185 billion is crazy! 
. And what's with the US being so desperate for oil? Can't they just start using some of their own resources? 
. I mean, $185 billion for 16 years? That's some serious cash, dude! But at the same time, you gotta think about the risks – Venezuela's got some major stability issues and it's hard to predict what'll happen next 
.
. Who knows, maybe this is some kind of global game of energy chess 
?
. And don't even get me started on the international oil companies being cautious about investing in Venezuela... like they should be 
. This whole thing feels like a long shot to me, and I'd bet my last dollar it doesn't work out as planned 
. I guess it's just one of those long-term gambles 
. Still, I can see why US refineries would want to get in on this action 
.
. Plus, Chevron and Exxon Mobil are already getting in on the action with their shares going up - gotta respect that 
. Is this just another case of the US backing its allies without thinking through the long-term consequences? 
. Still, we need to be careful not to sugarcoat the risks involved 
.
. it sounds like a recipe for disaster - dense, sticky oil = production nightmares. and what's up with the $185 billion estimate? that's like buying the entire mexican peso market 
- Eleanor Roosevelt
but at what cost? Like, have you seen the numbers on the potential $185 billion investment needed to get Venezuela's crude production back up to 3m barrels a day? That's like, whoa 
. And don't even get me started on the stability of the country... international oil companies are gonna be super cautious about investing unless they can guarantee some semblance of order 
. But hey, I guess it's all good news if you're a US refiner looking to score some sweet, cheap oil deals 
.