- Registrado
- 19 de Ene, 2023
From a strategic perspective that's honestly the best approach...better to use someone else's oil and keep yours in the ground for when it's really needed.Crude production will be down, but oil revenues and business will be up. The US in the only country that can process VZ's oil without cutting it with better oil, and the US is still the worlds #1 refiner. If only drops, oil companies just buy cheaper oil elsewhere and bring it to the refineries.
Ideally Venezuelan oil production won't increase substantially enough to produce a significant drop in price. Or if it does increase, it's at a cost similar to US domestic production. I don't think we'll see a meaningful increase in production for years if not decades assuming the current situation holds.There are one of two things that will happen with VZ re-entering the market.
Either the international market slackens and in that case US domestic pumping will slow. Oil companies will still continue their explorations and signing contracts, but they will drop domestic pumping to bare minimums. This will have a negliable effect on oil jobs.
That would be great if we could build new refineries. Pretty much all capacity expansion has been at existing sites, the last new refinery built with any meaningful bpd capacity was nearly 50 years ago. I would personally love to see new domestic refineries operating, but it's been so difficult to do so for so long I doubt any major with the funds to do so wants to take on such a project.Or production does not meet demand in which case nothing changes except the lower end of the market loosens up. This will mean more jobs and possibly new refinery construction.
Same deal with nuclear power, too many people are ignorant and don't know safety, technology and environmental protections in these sectors have advanced massively since the 1970s.
That's the thing, a lot of oil produced isn't the cheap stuff like WTI, it's unconventional oil similar to Venezuela's albeit of somewhat better quality. But like you noted I'd feel a lot more confident about a contract from the US delivering vs. somewhere like Nigeria. I remember the force majeure problems when it comes to Nigerian and Venezuelan crude.People also forget there is more at play than just price-per-barrel. Not all oil is created equal, and there are additional international fuckfuck games in play. That is, even at $50/barrel due to transit costs and taxes its still cheaper to pump and refine Pennsylvania and Texas crude for domestic use than to use foreign oils, even if it doesn't make sense to put those products on ships for Europe or Asia.
This is correct IF you have the capacity to refine and export it like US refineries. If we really want to capitalize on this strategically we need to expand domestic refining capacity.VZ's oil is high-sulfur and absolutely shit-tier. It is mostly used to make diesel for countries with no emissions regulations (i.e. BRICS). What this means is the Brazil now has a source of cheap diesel and the lower-end stuff they were buying is now on the market for 2nd world countries. And the stuff they were buying is now available for overregulated Eurofags.