How Trump's oily dreams could crumble into a dark pit like Venezuela

Let's begin with the new edicts from the neo-Caligula regarding the imperial satrapy that he claims now belongs to him. Not exactly edicts, but blatant threats directed at the new Interim President Delcy Rodriguez:

1. Crush the “drug trafficking flows.” Well, actually, that should be said to the Colombian and Mexican smugglers colluding with the big American buyers.
2. Expel the Iranians, Cubans, and other “agents hostile to Washington” – before Caracas is allowed to increase its oil production. That's not going to happen. 
3. Stop selling oil to "adversaries of the United States." That's not going to happen either. Therefore, it becomes almost certain that the neo-Caligula will bomb Venezuela again. 

Neo-Caligula, in another offensive from his motorized mouthpiece, also clarified that he intends to somehow reshape the Venezuelan oil sector through subsidies. “It might take less than 18 months,” which then metamorphosed into “we might need less time than that, but it will cost a lot of money”; and finally transformed into “a tremendous amount of money will have to be spent, and the oil companies will spend it.”

No, they won't, as several of the proverbial ones have already warned. Insider The major players in the US energy sector reject the prospect of investing fortunes in a country that could be engulfed in total chaos, should a neo-Caligula occur.  Try to impose a treacherous government on a population of 29 million. According to the Rystad Energy AnalysisIt would take at least sixteen years and at least 183 billion dollars for Venezuela to produce a mere three million barrels of oil per day.

The ultimate dream of the neo-Caligula is to reduce global oil prices to a maximum of $50 a barrel. To achieve this, the Trump 2.0 imperial faction will, in theory, assume total control of PDVSA, including the purchase and sale of virtually all of its oil production. 

US Energy Secretary Chris Wright, at an energy conference at Goldman Sachs, let the cat out of the bag:

"We will market the crude oil coming from Venezuela, firstly this stored oil [up to 50 million barrels], and then, going indefinitely forward, we will sell the production coming from Venezuela on the market." 

So, essentially, the neo-Caligula gang will seize, in fact steal, the sale of crude oil from PDVSA, with the money theoretically deposited in offshore accounts controlled by the United States "to benefit the Venezuelan people." 

There is no chance that Delcy Rodriguez's interim government will accept what amounts to outright theft. Even Homeland Security Advisor Stephen Miller has been boasting that the United States is using "military threats" to maintain control over Venezuela. When you are truly in control, you don't need to use threats. 

And China?

China had been importing around 746.000 barrels of oil per day from Venezuela. That's not much. Beijing has already been arranging to replace this oil with imports from Iran. China essentially doesn't depend on Venezuelan oil. Besides Iran, it relies on Russian and Saudi sources. 

Beijing clearly understands that the exorbitant imperial effort in the Western Hemisphere and West Asia is not motivated solely by oil, but also aims to force China to buy energy with petrodollars. Nonsense: with Russia, the Persian Gulf, and beyond, the name of the game is already petroyuan.

China is 80% energy independent. Venezuela, in fact, accounted for a mere 2% of China's 20% of imports – and these are figures provided by the US government itself.  

China's relationship with Venezuela on energy issues goes far beyond the cheap solutions employed by the United States. Here  Here's a summary showing that "Chinese agreements with Venezuela in the oil sector are, in fact, legally binding financial contracts, with amortization mechanisms, guarantee structures, clauses dealing with penalties, and derivative links heavily embedded in global finance (...) These agreements are connected – directly and indirectly – to Western financial institutions, commodity traders, insurance and clearing systems, including entities linked to Wall Street. If these contracts are broken, the consequence will not be 'a loss for China,' but rather a cascade of events: non-compliance with payment obligations triggering risks of financial losses, repricing of derivatives, legal disputes spanning different jurisdictions, and a confidence shock that will expand indefinitely. At a certain point, this ceases to be a Venezuelan problem and becomes a systemic global problem."

Furthermore, “over the past twenty years, China has become the operational center of the Venezuelan oil sector. Not merely as a buyer, but as a builder. China has provided refining technology, heavy oil upgrading systems, infrastructure projects, control software, spare parts logistics (…) Remove the Chinese engineers. Remove the technicians who understand the logic of the control. Remove the maintenance supply chains. Remove the software support. What remains is not a functioning oil sector waiting to be released, but an empty shell.”  

Conclusion: "Converting the Venezuelan oil sector, built by the Chinese, into an American-made sector would take at least three to five years." 

Financial analyst Lucas Ekwame touched on the main points. Venezuela produces a super-heavy oil as thick as tar. It doesn't gush out, having to be melted to reach the surface, and after extraction, it hardens again, requiring a diluent: no less than 0,3 barrels of diluent have to be imported for every barrel exported. 

Add to this the fact that Venezuela's energy infrastructure, built by China, is simultaneously suffering years of sanctions from the United States—even worse than those applied to Iraq in the 2000s—and the major failure of the neo-Caligula's oil "strategy" becomes obvious. 

This, of course, does not alter in the short term the feast of the vultures of imperial hedge funds devouring the carcass of Venezuela, starting with the horrendous Paul Singer, the billionaire Zionist who manages hedge funds and makes gigantic donations to MAGA political committees ($42 million in 2024), whose Elliott Management, in November, bought a Houston-based subsidiary of CITGO for $5,9 billion, a price that represents less than a third of its market value of $18 billion, thanks to the embargo on Venezuelan oil imports. 

It is inevitable that speculative investors will pocket up to $170 billion in the debt market. PDVSA's defaulted bonds alone are worth more than $60 billion.  

The big picture of oil in Venezuela is far more complex than the Trump 2.0 gang suspects. It's clear that, given the path ahead, we could reach a situation where the Viceroy of Venezuela, the gusano Marco Rubio, cuts off oil flows from Caracas to Shanghai. Well, considering Rubio's strategic "capacity," it would be best to immediately start assembling battalions of lawyers. 

Translation by Patricia Zimbres