Venezuela is about the oil, but not in the way the left says
Here’s an article about the Venezuelan oil industry. Venezuela’s oil is very thick and needs to be mixed with thinner oil to be usable:
… [T]he oil that in the past has been used for this [thinning process] is American oil which was exported to Venezuela, blended with Venezuelan sludge and then sent back to US gulf coast refineries to be turned into gasoline, diesel etc.
However, recently, a fair chunk of the oil that Venezuela used to blend was oil from Russia and/or Iran that was shipped in on the “shadow fleet” and then sold on having been laundered with Venezuelan oil to mask its sanctioned origins.
That’s not going to happen any more. Which will hurt Putin and the Mullahs2 a good deal because they really need that oil money to prop up their regimes and finance their military forces. …
Tie that in to the oil embargo for all Venezuelan oil announced last month and you hurt two other deserving targets too. First, and most obviously, it stops Cuba from getting cheap oil or bartering for it. As I said in my previous Insta-analysis3 this puts the Cuban regime in significant pain and may cause it to collapse. Cuba doesn’t have any hard currency money to pay for oil so it cannot buy it on the open market even though that would be legally fine.
Neither Russia nor Iran can afford to subsidize Cuba by giving them oil so Cuba is kind of stuck. One possibility is that Cuba will ship off a bunch of solders to Russia to die in Ukraine in exchange for oil, but that’s tricky because it exposes Russia’s oil tankers to the US and, worse, Ukraine.
Much more at the link. It’s a series of oil dominoes.
And also this:
Finally, the other thing the Maduro seizing did, was put Venezuela’s plans to seize the oil fields in neighboring Guyana on hold – probably permanently.
US control of the Venezuelan oil for now also would represent leverage over the remaining pro-Maduro power structure in Venezuela:
… [I]t seems like the Trump administration has decided that it makes the decision on how much oil Venezuela can sell and who to. For now that number is zero. I am sure that the Chavistas are being asked how long they think they can survive without oil income, and whether they might prefer to leave Venezuela for other climes and let people that the US approves of run the country and, more importantly, fix the oil industry so it can export oil to places the US approves of in volumes that mean that the global oil price drops.
Venezuela seems as though it may be a keystone in the Arch of Evil.
This article, via Instapundit, pairs well with neo’s.
https://pjmedia.com/sarah-anderson/2026/01/06/whats-really-next-for-venezuela-n4947951
Sending many Cubans to die in Ukraine also likely means more internal Cuban resistance to the regime.
On the Monday Open Thread, I posted this on the international implications of Maduro and Venezuelan oil:
_____________________________
@crasey: Roger Simon explores whether Maduro’s arrest was primarily about drugs or if it may have also been about proving the 2020 election was stolen. Hmmm…
I’ve also got to believe it is a medium-term oil play to safeguard supplies in the Western Hemisphere and as a direct threat to Russia, which needs high oil prices, and China, which needs oil period.
We now read that Venezuela has larger oil reserves than Saudi Arabia. However Venezuelan oil is of a poorer grade than Saudi and requires substantially more costs to process. So Venezuela is not going to become Saudi Arabia.
Furthermore, recent Venezuelan governments have allowed their oil infrastructure to seriously degrade so it now requires rebuilding.
Venezuela oil is not a magic bullet for anyone. But as a longer-term investment in the future it’s sound.
I saw an interesting video on this matter, by a young Venezuelan journalist.
Here it is, on X:
https://x.com/RealFletch17/status/2007806477717606809/video/1
I assumed the journalist I linked to is Venezuelan. I am not sure, about that: on his X account he presents himself as “Lawyer & Historian (Harvard | Stanford)”
So Venezuela had connections with Cuba, China, and Iran (? this part is not entirely clear). There is a sense in which Trump (directing the United States military) took out a key stone in the Arch of Evil. One could argue that by taking down Maduro we have to a large degree kicked China out of the Western Hemisphere.
If so that is huge.
Strategically removing communist influence from the western hemisphere is nothing but win-win.
The methods even more delicious.
“..in the way the left says”??
NOTHING is “in the way the left says”….
To misquote The Bard, “Everything will come of nothing. Grift again!”
And again and again…
“Nick Shirley Drops Another Video, and It Will Blow Your Mind”—
https://pjmedia.com/matt-margolis/2026/01/07/nick-shirley-drops-another-video-that-democrats-wont-want-you-to-see-n4947999
H/T Instapundit.
+Bonus (California-style)…
“GOODER AND HARDER, CALIFORNIA: FireAid Funneled Cash to Podcasters, Illegals and Fungus Planting.”—
https://instapundit.com/767722/
Hi, long-time energy industry hack here with my (TL/DR) $0.02. US Gulf coast refineries are the most complex in the world. Refinery complexity is all about taking an input that contains more carbon than you want but ending up with as much hydrogen as you need – just add water. They are designed to process all the “bottoms” using a variety of thermal, catalytic, and other processes to fully use almost all the energy in a heavy oil barrel (fun fact: heavy oils such as those from Venezuela or Alberta/Canada have about 7% more energy per barrel than a light crude). Fun fact #2: these heavy crudes sell for about 10-12% less per barrel than lighter crudes. So, the energy from the heavy crudes is almost 20% less expensive per BTU for a refiner able to handle that input.
These refineries can take a barrel of whatever heavy, contaminated (high metals) crud the Mexicans, Canadians, Venezuelans, or anyone else can supply and by the time the last squeal is heard, we are left only with desirable products – gasoline, diesel, jet fuel, petrochemical feedstocks. In fact, we (U.S.A.) import heavy residual (left over) refining output from a number of countries as input to our USGC refining complex at volumes greater than supplies from Mexico, Canada, Venezuela, and Saudi Arabia.
Whatever Venezuela is about it not about our oil supplies. It may be the petroleum version of chess. China wants Venezuela’s crude because it bothers us and offends our hemispheric sensibilities; same with the heavy Canadian crudes from Alberta. Mostly though, they cannot extract full value from it and end up with a lot of left overs (residual) that they must burn in boilers since most of their refineries are not configured for deep conversion of low grade, sour, high metal content crudes. Moreover, their EV strategy has killed the demand growth for gasoline and diesel, removing much of the incentive for further investments in deep conversion.
Fun fact #3: much of the technology used in the USGC to refine uncooperative oil inputs was developed in the 1970s and 1980s out of our synfuels program (coal to gasoline). We learned how to deal with complex high temperature-high pressure catalytic processes.
Bottom line: our technological advantage in refining allows us to pay considerably less than any other country for the energy that becomes gasoline, diesel, jet and petrochemicals from the USGC.
Here’s some history you may not know. Venezuela had a US refinery in St. Croix that refined their oil. The company was Amerada Hess operating under the name Hovensa. Obama’s EPA threatened Hovensa with huge fines for “pollution” as well as insisting on millions more to upgrade the refinery. Hovensa decided to shut down the refinery. St. Croix’s economy cratered. Venezuela had nowhere to refine their oil. And the downward path to today was started. Why Obama decided to do that is unknown.
I have read Venezuela was providing around 4% (500,000 bpd) of China’s oil need.
China’s suppliers:
Russia: ~2.1–2.2 million bpd (18–20%).
Saudi Arabia: ~1.6–1.7 million bpd (14–15%).
Iran: ~1.6–1.8 million bpd (15–19%, via evasion routes).
Iraq: ~1.2–1.4 million bpd (10–12%).
Malaysia (largely relabeled Iranian/Russian/Venezuelan): ~1.4 million bpd.
United Arab Emirates, Brazil, Venezuela (~0.5–0.6 million bpd).
While not significant, I think our strategy of regime change includes both Iran and Venezuela. Because Russia, Iran and Venezuela oil are sanctioned, China is buying at a discount to the market price– a serious advantage to China. If we can see new governments in Iran and Venezuela that are friendly/neutral to the west and can settle the Russia-Ukraine war on terms both countries can accept, China will be the most affected in that nearly half the oil they are buying now will become more expensive.
A large portion of Venezuela’s debt of about $160-180 billion has been loaned by China ($62 billion) which gives them leverage. Venezuela’s 2025 gdp is only $83 billion, down significantly from past decade peak of $380-400 billion.
It’s a series of “oil domino’s.” Pithy and succinct. And quotable!
huxley
Furthermore, recent Venezuelan governments have allowed their oil infrastructure to seriously degrade so it now requires rebuilding.
The degradation of Venezuelan oil infrastructure was a long time coming. Circa 2002, Chavez took control of PDVSA, wanting to get control of the goose that laid the golden eggs. After the unsuccessful PDVSA strike of 2002-2003, Chavez fired the strikers, and replaced professionals with party hacks.
In 2007, a drilling rig burned down in the Anaco area, news which Caracas Chronicles covered. Burned down drilling rigs are not a common occurrence. As there were questions about the condition of the drilling equipment, I emailed a former professor of mine who specialized in drilling. He replied that for years he had been making annual inspection tours of Venezuelan oil infrastructure—more drilling than refining, I believe. In recent years he had observed a marked deterioration in equipment condition.
Downhill from 2003-2007, with 18 subsequent years in the same trend.
(I worked in Venezuela in 1978-79, and in the aughts worked with Venezuelan petroleum engineers in a small company in TX. )
@ Donald Hertzmark & Gringo:
One of the best parts of Neo’s blog is the Neophiles who have direct personal experience of the topics under discussion.
Thanks for sharing your (real) expertise.