No. of Recommendations: 7
...missing the broader context of getting Venezuelan oil into more markets so that China gets less of it and Iran, Russia and China have vastly decreased influence in the western hemisphere.
Ah. You misunderstood my point.
I wasn't talking about the effect of selling Venezuelan oil. I was assessing whether it was likely to happen. It might be a good thing for U.S. national security interests for U.S. oil majors to go in and rebuild Venezuela's oil economy regardless of whether it's profitable to do so. But they won't go in and do it unless it's profitable to do so. Because they want to make money, not advance national security.
The reason I couched it the way I did is because of other conversations I've had with Steve, which you might not have read. Steve is of the opinion that Trump is motivated by a desire to help his oil-producing supporters by increasing the global price of oil...which goal would be advanced by limiting, not increasing, global production. So in other conversations, he's discussed the impact of the Venezuelan operation as being motivated by a desire to make sure that Venezuela isn't producing a lot more oil - and that such motivation would underlie other geopolitical activity in other parts of the world, like Iran.
All my points still stand, though. It's a dumb strategy, because the private oil companies that are capable of making the type of investments in Venezuelan oil infrastructure are not going to be willing to do so. That's for a variety of reasons, but primarily because the price of oil is too low for that to be profitable. There's no riches to be had in Venezuela, which means there's little private money to be invested in Venezuela. If competing with China is your main goal, then cutting U.S. foreign development funding is pretty dumb - because you can't always replace the soft power of U.S. federal funds with the soft power of private corporate involvement. China has their Belt and Road, and since that's a government program they get to decide to send billions to countries like Venezuela. The U.S. has gutted most of the avenues where the U.S. government was in control of whether to send billions to other countries, and we're going to see in Venezuela that you can't really replace that with private funding.
As for the idea that increasing Venezuelan oil production hurts China, that's silly. Oil is a fungible product. If Venezuela's oil production increases (other things being equal), it will be easier for China to get oil. Either they'll buy some of Venezuela's increased production, or they'll just buy the oil that the people who buy Venezuela's oil would have bought. Since Venezuela supplied a rounding error's worth of Chinese oil imports (a few percentage points), and since China has virtually no supply concerns for their other suppliers (mostly Saudi and other middle Eastern suppliers and Russia), it's all a wash.
