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If I come to correctly, I think he mentioned the world about twenty or twenty one times his first press conference. That really tells me everything.
That's Bloomberg opinion columnist Javier Blass, and that word he's talking about that President Trump used almost two dozen times in that one press conference is oil. It's part of almost every conversation about Venezuela. The President has big plans for the country, and he's hyper focused on its energy sector.
We're going to have our very large United States oil companies, the biggest anywhere in the world, go in spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country.
Since the attack, oil prices have swung back and forth, and on Friday they were right about where they were the night before. The US removed Nicholas Maduro from Venezuela. On Friday afternoon, President Trump met with executives from the oil industry at the White House to talk about what comes next.
All of the companies here today are going to be treasured partners and bringing the nation of Venezuela back to life, restoring its economy and generating great wealth for their companies and for their people, and also great wealth for the American people, and tremendous wealth for the companies that are going.
So why Venezuela It only produces about one percent of the world's oil, Javier Blast says, you have to look at the country's past to understand its potential.
Back in nineteen seventy, which is the heyday of the industry, the country produced about three point seven million borrows a day. Today he palms about one million borrows today. It is a shadow of what he used to be. But he has quite a lot of oil and the means to be one of the top oil producing countries. But having the means doesn't mean that it's gonna happen.
I'm David Gerat and this is the big take from Bloomberg News on today's show, Venezuela's oil, what it would take to get it flowing the way President Trump wants, and how it's key to the president's foreign policy objectives and his political success at home. Javier Bloss is a columnist with decades of experience covering energy that He's spent years touring oil fields and refineries.
Oil for Venezuela is a costco is basically what keeps the economy running.
And given that, Javier says, you'd think the country would have invested more in the industry in recent years. But Venezuela's oil infrastructure has fallen into disrepair. It's a shadow of what it once was.
The oil sector under Maduro was just complete mismanagement, corruption, and then exacerbated by the impact of American sanctions on the sexual The facilities are completely impact state. They need repairs, they need basic maintenance, and that has not been happening. Venezuela has lost about twenty five percent of his population, and this has been mostly educated people who used to have very well paid jobs in the oil industry and
that they are no longer there. So under Maduro it was just a complete collapse.
Delci Rodriguez was the country's oil minister before she became the vice president, now the acting president of the country. How could Venezuela's approach to oil shift now that she's in charge.
Well, the first question is is he really in charge? Because Trump claims that he is running Venezuela, so it's difficult to know exactly who really is calling the shots in Caracas. Delci Rodriguez has been seen as a relative moderate figure within the Chavismo, this revolutionary movement that has been running Venezuela for the last twenty five years. So very much depends on what she wants to do, but it's also going to depend a lot of what the
White House allows her to do. The oil fields there are so prolific that even with just some basic expending, some basic maintenance, things could really regain some traction very quickly.
And just to get a sense of what I'm talking about, I have been speaking with format executives of the state on oil company called Peevesa and Venezuela and oil engineers, geologists who have a great knowledge of the industry, and one of the things that they said to me is, so you to understand what the problem was, is that all what is needed today to get things starting to look a bit better. Is that pump that failed seven
years ago, We're going to replace it. That oil pipeline that started leaking three years ago, We're gonna fix it. This is the state of the industry just it was led to rot. And now if some money can be a spend that could really go a great way into a stabilizing production and it started growing. But they're going to be conflicted. Needs Venezuela needs food, lots of food. It's a hungry nation. And how the White House balanced that food versus oil, how the government in Caracas balance that,
and at the same time, the relationship with Washington. I don't know how that's gonna play out.
You know, you and I have talked recently about how the world is washed with cheap oil. If you guys doesn't need cheap oil at this point in time. Given that, what is your sense of the motivations here on the United States's part?
Well, I think that President Trunk has been quite transparent about this. I mean, I remember back in two thousand and three covering the invasion of Iraq and a lot of debate and really heated arguments about is this about oil? And the answer at that point from the administration of George W. Bush was absolutely not. This is about democracy.
And in this occasion, President Trump has been very clear that oil is absolutely central to what he's doing, and he has been quite transparent that he wants lower oil prices, and I mean lower than today, which are already the
lowest in five years. We are trading between fifty five and sixty dollars a barrel, and President Trump in the past has talked about getting American oil West Texas Intermediate down to fifty dollars a barrel, and he wants the price of castling down to two and a half dollars. I think he will be very happy.
The US produces a lot of oil, has access to oil from Latin America, from Canada. How much influence does that give the US.
The Americas today all the way from Alaska to Patagonia in Argentina, produce about forty percent of the walls oil. That's not research, that's actual production today. So President Trump is an unfortunate position that this is happening under his watch. Some of it he is trying to engineer, but a lot of it will be happening, notetheless because of discoveries in Brazil, in Guijana, the growth of the industry in Canada,
and certainly the growth of the usl industry. That means that there is a surplus of oil today in the market, and it means that prices are going to stay lower than that there has been the case in recent years. But it also means that that buffer allows for the market to carry on if there is some kind of shock, and what could be a shock that the US decides to do something about Russia or Iran. The American military adventures in the past were constrained by the impact that
those will have in the price of oil. Today, the Pentagon really is underrestrained in a way that I don't think we have seen in America, probably in the last half a sect entry James Monroe, the president more than two hundred years ago who coined this faaro influence for the United States across the Americas, and then Donald Trump, so we get the Donrow doctrine. Secretary Marco Rubio has
made very clear this this is our backyard. This is our area of influence, keeping the Americas for the US, preventing other countries to set any kind of footprint, and I'm thinking mostly about China and also controlling the natural resources of the region. The US can do things today that previous presidents probably could not do because the price of oil will have gone to more than one hundred dollars a barrel, and then gasoline prices will have increased.
If your President Trump says Venezuela is going to turn over thirty to fifty million barrels of oil to the US. Here's what is. Energy Secretary Chris Wright said about that on Wednesday at a Goldman Sachs conference.
Look, I'm working directly in cooperation with the Venezuelans, and we are going to this is this is the crew that's backed up an onshore storage and that's in offshore floating storage. It's going to get that crude moving again and sell it it just like we did in our businesses.
Or thirty to fifty million barrels sounds like a lot of oil, is it in the grand scheme of things.
It's not. I mean that is at the high end of that range. Fifty million barrels is only half of what the world consumes in one day, so it's basically twelve hours of global oil consumption. But you put fifty million barrels of Venezuelan and oil into the US golf of Mexico coast kind of refining system, that's going to have an impact. I mean, that is really going to
overwhelm the market and same prices down. But also more importantly, getting that oil flowing will allow the Venezuelans to keep production where it was in December close to a million barrels a day because they were in a position where they will have to shout down production because they didn't have anywhere to put the oil, because they were not able to esport the oil. So it's not only the impact that oil that is the storage will have on
the American market. Is also that Venezuela kind of start the recovery process, although these are really baby steps.
What the US control of Venezuela's oil could mean for two of its biggest rivals, Russia and China, that's coming up.
Are you concerned about increasing tensions with Russia or because of your tankard seizures? And how does the US action in Venezuela impact the ongoing relationship with China and the President's relationship.
With President she I think the President has very open, honest and good relationships with both President Putin and Russia, and also President she of China.
The effects of President Trump's attack on Venezuela and the arrest of President Nicolas Maduro are being felt beyond the Western hemisphere.
We've seen now five vessels seized after the latest action reported by US Southern Command. Today, US Force is seen boarding that vessel identified as the Olina.
On Friday, the US Coast Guard seesed another sanctioned oil tanker, as the Trump administration continues to crack down on so called shadow vessels. These are tankers using murky tactics to transport oil from countries facing US sanctions like Russia and Iran. A lot of that oil winds up in China, which has been a big investor in Venezuela. It's poured money into the country's infrastructure and oil refining capacity part of its Belt and Road initiative that includes extending and consolidating
Chinese influence around the world, including in Latin America. So Haafer, what does it mean for the world's second largest economy, Maduro being removed in President Trump promising these big changes to Venezuela's oil industry.
I think that for China, I mean, first of all, they're going to lose access to a source of cheap oil. Venezuela was forced to sell his oil at a significant discount to China because China was the only buyer. So China all the sudden is going to have to find a replacement. There is oil in the market that can be used to replace Venezuela and oil. Canadian oil is of similar quality, but Canadian oil trades around eight to
ten dollars higher. So that's that's an extra cost. I mean, is that gonna really have a massive impact on the Chinese economy. As you said, the second largest economy is not big enough to really move the needle of the GDP, but for some oil refiners in China, they're gonna notice. It's more importantly, I think it's the it's the signal that the Chinese authorities get out of the Americas. That
seems to be the message from the Trump administration. These are the countries where we have influence, and this is our oil, and it's for us to decide. For Russia, that's more complicated. President Trump is really driving the price of oil down. Russia is selling now oil as low as forty dollars a barrel, and by now Vladimir Putin also has lost a two that I think he was trying to use with President Trump, which was in exchange for some kind of deal in Ukraine. Look at the
oil fields of Siberia. Your American oil companies can have access to the Russian oil riches. Well, President Trunk can turn around and say, Bladimir, thank you very much for your offer, but I control Venezuela now, so you know, get lost. American refiners, particularly those in Texas and Louisiana, love Venezuela and oil. Most of the Venezuelan oil looks more like syrup or even marmalade. It's really biscuits, very
dense and therefore relatively more difficult to refine. The refineries in the US are built precisely to process that kind of crude. So while the quality is low, it would be a mistake to think that low quality means we don't like the oil.
Any plan to rebuild and deploit Venezuela's oil production capacity would be complicated. It could take years and cost upwards of one hundred billion dollars according to some estimates.
But if all.
Goes well, big Oil could make a lot of money in Venezuela. Chevron, the second biggest US oil company, operates there and accounts for about twenty five percent of the country's output, and refiners like Sitco in the Gulf of Mexico are uniquely poised to benefit.
Did they know exactly what was going to happen? I doubt it. I don't think that the American oil industry have knowledge of exact military plans or even that Trump has already taken the decision to take Maduro. I will be very, very surprised about that. Oil companies are in some cases, when you are talking about big oil is
always the case, they're like mini countries. They have almost like their own diplomatic surveys who is working on potential outcomes in potential scenarios in oil rich countries like Venezuela. There's more than an interest. Chevron is already there. Let's not forget that American's second largest oil company has to
stay in Venezuela. Has fought very hard over the last twenty five years, not only with the government in Venezuela, but so with several administrations both on the left and on the right and the White House to be able to keep his operations there in some way. So there is interest. I mean, is that interest means that everyone in big oil is going to be investing billions of the last in Venezuela tomorrow. And now, I mean the price of oil is low, investors are putting pressure on
companies to go easy on spending. So the interest may not transform in in media the spending, but oil companies always go to where the oil barrels are.
President Trump has floated reimbursing companies for spending money on improving infrastructure Venezuela, even using taxpayer dollars to do that. In your view, is that essential? Would they do this otherwise or they need to have some sort of incentive like that.
I think that probably they would like backstop by the government, perhaps loans, back back up by the Esport Import Bank of the United States. Again, that's not new. It happens in many other projects at the moment. Some of the biggest oil companies in America have some kind of loan guarantees from the US to invest in places like say Mozambique on natural gas LNG projects. So that's what I think that they are talking about direct subsidies. I will
be very surprised about that. I mean, what the hell the US government would be subsidized in the oil industry when they can make it back perfectly fine in drilling in s Texas, New Mexico, Oklahoma. I would not understand that. But what I know, David, over the last few months, I have been surprised of what the Republican Party does to the American capitalist system. I mean, I thought I was about getting the government out of companies, and the
White House is about getting equity in companies. So I don't know. I mean, will I be surprised if the US owns an equity stake in oil fields that they are owned by American oil companies in Venezuela.
Yeah.
A year ago I would have said yes, I will be very surprised. That's not going to happen today. I don't know.
Maybe we hear President Trump making this geopolitical argument for taking control of the Venezuelan oil industry. He's making an economic case to the American people as well. What is the reward he's promising US citizens and how long does he have to make good on that promise.
I think that the rule he's promising to US citizens, and particularly ahead of the Midtown selection, is I get it. Inflation has been a big problem, and I'm fixing it. And at least he's fixing one of the most visible prices for Americans on a daily basis. Almost everyone who is commuting to war going with to drop the kids at the school, et cetera, et cetera. Sees the price of gasoline on the big signs of the pumpa stations, and I think that his promise to the American citizens
is We're going to fix the price of oil. We're going to fix the price of gasoline. And by the way, this is not a quack mare in the Middle East, kilometers away in a place that you have never heard of. This is it by doing it jus round the corner across the Caribbean, in our backyard.
This is the Big Take from Bloomberg News. I'm David Gerat. The show is hosted by me wanha and Sarah Holder. The show is made by Aaron Edwards, David Fox, Eleanor Harrison, Dengate, Pattie Hirsch, Rachel Lewis, Chrisky, Naomi Julia Press, Tracy Samuelson, Naomi Shavin, Alex se Cura, Julia Weaver, Young Young, and Takei Yasuzawa. To get more from The Big Take and unlimited access to all of Bloomberg dot Com, subscribe today at Bloomberg dot Com Slash Podcast offer. Thanks for listening.
We'll be back on Monday.