The Truth About the Venezuelan Oil HYPE

(00:00.788)

Venezuelan oil fantasies. I again watching so-called experts parade themselves all over television, claiming that they know about Venezuelan oil, claiming they know a darn thing about the oil markets. Actually, they know less than Taylor Sheridan and the television show Landman.

You are being fed so much BS, it’s hard to get one’s arms around. people coming out bending over, it’s not bending over backwards, it’s playing twister as an octopus, trying to justify these things. Watch Glenn Beck talk about this is great because then China is not gonna have access to Venezuelan oil.

So you don’t want China to have access to energy. You don’t think that China could just turn around and buy oil from Russia. You don’t think the Saudis will sell the Chinese oil. You do remember the last time we really embargoed a country when it came to oil. That was Japan in World War II and that didn’t turn out well. And Japan, well,

They were pretty much bad guys. They were doing horrific things in China at the time. I don’t see China, I mean, invading anybody. Anyway, not neither here nor there. First and foremost,

The oil companies, didn’t, I mean, they’re putting it out there. They’re just putting out like the oil industry executives were in on this and they knew what was going on. No, no. The next thing, the next thing. Estimates to rebuild, estimates to rebuild Venezuelan oil capacity.

(02:10.99)

I’ve heard numbers north of a hundred billion dollars.

North of $100 billion. Now, again, you have to factor. You have to factor that number. Factor that number into an oil executive’s mind. And a country, are they gonna, are you going to want to go out and invest that type of money in, in essence, it’s the same regime.

It’s the same regime, fact, they didn’t overturn anything. They got rid of Maduro, same apparatus, same people are in charge at this point in time. You do see the political risks there, do you not? And again, the president also came out and well said that, taxpayer’s gonna pay? We are gonna subsidize rebuilding the Venezuelan oil industry?

Yeah, you know, I At some point in time, you know, maybe maybe I don’t know maybe Trump never watched Godfather one and two I suggest maybe you know Michael Corleone figured out that hey, know, maybe we shouldn’t do business in Turn out there there’s risk that’s involved there When you take a look at where oil is trading right now

where oil is trading right now. The costs that are gonna be involved in rebuilding Venezuela’s oil capacity, coupled the fact with the political risk that’s involved. You got to come up, first and foremost, with a break even point. It’s pretty simple, people. It’s not that complicated. It’s complicated if you are a cable news anchor or some pundit on TV. To them, they don’t understand, I guess,

(04:14.434)

bottom lines and costs that are involved. Okay? What is your bloody extraction cost? What is it going to cost you? I’m gonna go back in time. I’m gonna go back in time and actually, I’m a massive, was massive and still am critic of the Bush administration, W’s administration and Dick Cheney himself. However, okay?

I, they had some good points. They had some good points. I actually wrote about this and I’ll never forget it. Never forget it was Terry Moran. Terry Moran was, is prior, mean, going off on the fact, you remember the controversy that Democrats are bringing up because Dick Cheney was having meetings.

meetings with oil executives and they weren’t allowing reporters there and what are you doing? All this. This was a big deal back then. In essence, what they were doing at that point in time, and again, was they developed the technologies that allowed for fracking here in the United States and the ability to extract oil from places we couldn’t extract from in the past because it didn’t make any economic sense to do so. And again,

that helped with the oil boom here in the States. Now this was at a point in time later on in the Bush administration, if you do recall, the price of oil went above for the first time of three bucks a gallon. That’s when Maxine Waters said she wanted to socialize the oil companies. And again, even at that point in time, people in the, everybody’s up in arms about it. They have no idea the different players that are involved, how Wall Street was involved.

and the various different in storage and processes and trading and all the other things that involved the driving the price of oil up. lot of economic ignoramuses when it came to oil. People were just pissed off. They didn’t want to know why. They didn’t want to look into it. They just want to be angry because they were paying a lot at the pump. Neither here nor there. What’s the extraction costs going to be in Venezuela?

(06:38.934)

Again, it is a heavy, crude. Actually, I recall this. The first time I left the country, we went on a family vacation when I was a kid to Venezuela. And I remember you’d see the little tarball, because that’s they were, tarballs on some of the beaches they had there. And it was like this.

stick heavy and you didn’t want to sit in or stick because again, that wasn’t coming out of your bathing suit by any stretch of the imagination. But anyway, it’s a heavy, heavy crude and we have the capacity to refine it here in the United States. But again, at what costs? What’s it going to cost to get it out of the ground? Where’s oil trading right now?

What happens? Let’s say we go back online. I think their highest capacity of Venezuela was close to five million barrels a day. Now, if you are Chevron, your ex-on mobile, your BP, are you going to want to destroy, if you’re gonna be opening up these wells, follow along here.

Other wells that you already have working that are let’s say profitable at let’s say I’ll just throw it out here. Let’s just say at $50 a barrel.

You’re going to make those wells unprofitable by driving the price of oil down because you’re going to increase the supply by let’s say driving it down to $45 a barrel. As a businessman, is that something you’re going to do? Again, all of the risk that’s involved on top of that. Is that something that you are going to do? Also, you’ve got this other thing that’s going on.

(08:40.046)

there in Iran, where, gee, who knows what could happen there. That country could be, it could actually really have a regime change. And the extraction costs in Iran are a lot less than they are in Venezuela. Again, I want you to play, play your own little oil executive for a day.

I am, most people just think of, geez, we’re the Clampets and we just, know, bubbling crude coming out of the ground in the backyard. It doesn’t work that way.

And that’s where we’re at right now. So when you see some…

economic, ignoramus pundit, jumping up and down about the wonders of Venezuelan oil, maybe.

Maybe, but this is not going to happen any time soon. It’s not gonna happen any time soon. No, you’re not gonna see. And again, you think oil companies are gonna wanna drive barrel oil out of $20. mean, do you know what that would do to their business?

(10:01.654)

Anyway, Watchdog on wallstreet.com.