US Oil Companies Are Not Falling for Trump's Venezuela Gambit
A high-stakes gamble by President Donald Trump to lure American oil companies into extracting fossil fuels from crisis-stricken Venezuela seems doomed from the start. Despite his confident boasts, industry leaders and experts are skeptical about the prospects of a successful oil rush in the besieged country.
The U.S. seizure of several oil tankers linked to Venezuela has sent shockwaves through potential investors, who are increasingly wary of getting entangled with a country where prices are hovering around $55-60 per barrel, making it unprofitable for companies to increase production. "It would be premature to speculate on any future business activities or investments," said ConocoPhillips spokesperson.
Trump's carrot-and-stick approach, offering tax reimbursement and guarantees, has fallen flat with oil experts, who warn that the country's infrastructure is in shambles and the oil sector is already contracting due to oversupply. "They're not going to get paid compensatory damages for too much supply by adding more supply," said Yale professor Jeffrey Sonnenfeld.
Dan Pickering, chief investment officer at Pickering Energy Partners, has expressed doubts about the viability of the Venezuelan project, stating that production might only pick up after three years with significant guarantees. Sonnenfeld disagrees, pointing out that oil companies are already in contraction mode and not eager to take on additional risks.
The stakes are not just about oil; they're also about Trump's domestic agenda. By pushing an aggressive oil extraction program in Venezuela, the president is attempting to divert attention away from issues such as his handling of domestic economic vulnerability, which has been widely criticized.
Industry leaders are in a tough spot, with some facing pressure to support Trump's plan while others risk contradicting him on a contentious issue. Sonnenfeld believes that companies need to have "the character to stand up" against the president's tactics, adding that the laws of economics cannot be changed magically by what Trump says and does.
With Venezuela's oil infrastructure in disrepair and the country's political leadership in disarray, it seems highly unlikely that a successful oil rush will materialize. As Francisco Monaldi, director of the Latin American Energy Program at the Baker Institute, noted, "recovery is remote" without stable relations with the United States and Europe, a legitimate government, and a credible legal framework.
Ultimately, Trump's gamble on Venezuela appears to be a flawed strategy that will likely backfire.
A high-stakes gamble by President Donald Trump to lure American oil companies into extracting fossil fuels from crisis-stricken Venezuela seems doomed from the start. Despite his confident boasts, industry leaders and experts are skeptical about the prospects of a successful oil rush in the besieged country.
The U.S. seizure of several oil tankers linked to Venezuela has sent shockwaves through potential investors, who are increasingly wary of getting entangled with a country where prices are hovering around $55-60 per barrel, making it unprofitable for companies to increase production. "It would be premature to speculate on any future business activities or investments," said ConocoPhillips spokesperson.
Trump's carrot-and-stick approach, offering tax reimbursement and guarantees, has fallen flat with oil experts, who warn that the country's infrastructure is in shambles and the oil sector is already contracting due to oversupply. "They're not going to get paid compensatory damages for too much supply by adding more supply," said Yale professor Jeffrey Sonnenfeld.
Dan Pickering, chief investment officer at Pickering Energy Partners, has expressed doubts about the viability of the Venezuelan project, stating that production might only pick up after three years with significant guarantees. Sonnenfeld disagrees, pointing out that oil companies are already in contraction mode and not eager to take on additional risks.
The stakes are not just about oil; they're also about Trump's domestic agenda. By pushing an aggressive oil extraction program in Venezuela, the president is attempting to divert attention away from issues such as his handling of domestic economic vulnerability, which has been widely criticized.
Industry leaders are in a tough spot, with some facing pressure to support Trump's plan while others risk contradicting him on a contentious issue. Sonnenfeld believes that companies need to have "the character to stand up" against the president's tactics, adding that the laws of economics cannot be changed magically by what Trump says and does.
With Venezuela's oil infrastructure in disrepair and the country's political leadership in disarray, it seems highly unlikely that a successful oil rush will materialize. As Francisco Monaldi, director of the Latin American Energy Program at the Baker Institute, noted, "recovery is remote" without stable relations with the United States and Europe, a legitimate government, and a credible legal framework.
Ultimately, Trump's gamble on Venezuela appears to be a flawed strategy that will likely backfire.
I gotta say, this whole thing sounds like a bad movie script... 
Trump thinks he can just swoop in with some promises of tax breaks and guarantees, but the experts are all like "Uh, no thanks". It's like, dude, you can't just magic away a country's economic problems 
. And what really gets me is that this whole thing is supposed to be some kind of distraction from his domestic issues... 
Like, no, Trump, we're not buying it 
. Venezuela's oil infrastructure is basically non-existent at the moment, and even if they did somehow manage to extract all that oil, there's no guarantee it'd be profitable 
. I mean, come on, Trump, you need to think about the bigger picture here... 
It's like he's trying to solve a puzzle with too many pieces that don't quite fit 
. Anyway, I gotta agree with Francisco Monaldi - recovery is gonna be tough without some semblance of stability in Venezuela 
.
. The oil companies being pressured into going after more resources just doesn't add up - they're basically taking a risk on a country with a pretty shaky situation 
. The experts are right, the laws of economics can't be just waved away 
.
. I mean, who would invest in Venezuela right now? The country is literally falling apart 
. And oil companies are already struggling with oversupply and low prices, so adding more production just seems crazy 
. I'm not surprised industry leaders are hesitant to get on board with this plan 
. oil companies aren't eager to take on additional risks, especially when there are more pressing issues at home like domestic economic vulnerability. and let's be real, the laws of economics can't be changed magically by what the president says 
.
. I mean, come on, Trump thinks he can just waltz in there and make oil companies fall for his tricks? Please. The guy's got no clue what he's doin'. Those oil experts are spot on - the infrastructure is busted, the prices are crazy low... it's not like anyone's gonna be makin' a killin' over here 
. Venezuela's in shambles, and Trump's gamble is just gonna make things worse 
.