No. of Recommendations: 5
Mexico does not export a lot anymore. The previous Mexican administration decided to build up domestic refining capacity, rather than importing refined products from the US, so there is progressively less crude to export. When Trump the Great and Perfect imposed his tariffs last spring, Canadian crude was exempt, but Mexican was not. Mexico pivoted to exporting to other countries. Canada cannot pivot to exporting to other countries, because much of their oil is landlocked. If the US regime issued an edict that only Venezuelan heavy sour be imported, the pipelines from Canada be cut off, the Canadian oil, some 2Mbpd, would, effectively, be off the global market.
In the short run. In the longer run, if the U.S. displaces Canadian imports of oil, Canada will simply build up the capacity to move more of it to the West Coast for export. In during the interim, China can simply look to pick up any slack capacity from Russia, especially if India has to reduce some of their Russian imports in order to paper over a trade agreement with the U.S.
I know that your investing thesis is that the U.S. is going to shortly take action to drive up the price of oil so that Trump can repay his Big Oil donors for supporting his campaign. I think it's far more likely that Trump stiffs his Big Oil donors to keep oil prices low and is in no way going to go out and bomb Kharg Island.
[BTW, I know you're expecting something like this to happen any day - but even if we were thinking of bombing Kharg Island, he'd almost certainly wait until the USS Ford supercarrier group returned from their field trip to Venezuela. We removed our aircraft carrier from the Middle East, and for the time being the Fifth Fleet doesn't have an aircraft carrier group. So, while I don't think we would do that in any circumstances, it's certainly not happening in the near future.
