US Considering Venezuelan Oil? An act of DesperationThings are looking bleak for the future of US oil supply. Just how bad is it?
The US is now scrambling to obtain additional oil sources after the ban of 800 kbpd of Russian crude. Instead of looking north, they are going so far as to find a way to morally reconcile obtaining additional supplies from Venezuela, giving in to efforts of years of sanctions and stranglehold against the Communist regime, which has crippled the country and caused so much suffering for the Venezuelan people.
It is reported that the terms and conditions they are seeking is that any oil must only go to the US. How's that for fairness?
The kicker is that this is being done with the full knowledge that Venezuelan oil contains currrently banned Iranian and Russian oil and condensates as diluents.
If only there was a 800 kbpd tube running from the vast Canadian oil sands to the US gulf.
Without the Keystone pipeline to rely on for energy security, and a hobbled domestic energy industry due to misguided policy, the US is showing signs that it is now clearly in a pickle.
Ironically, it was the Americans that strongly objected and warned the EU to construct infrastructure to allow a broader range of energy sources to avoid the overreliance on Russian gas pipelines. Putin now has the ability to use the threat of cutting off energy supplies as a weapon, allowing him much more leeway to assert his will, like fighting Ukranian Nazis.
The news images from the disaster of an economic sanctions defeat in Venezuela won't be as sensational as those of the US defeat in Afghanistan and the bungled retreat and evacuation, but economically it would be more impactful, securing the future of the current regime in Venezuela to stay in power. With mistrust of the US, they will strengthen the close ties they already have with Iran, Russia, and China.
The return of investment and capital to Venezuela sitting on the world's largest oil reserves would result in significant competition to Canadian heavy oil going to the gulf. Something which we should be very concerned about.
If the attempt to create a US/Venezuelan oil supply agreement to bypass sanctions fails, I would not be surprised if the next administration restarts the Keystone project as it would be deemed a matter of national security.
Meanwhile, realize that when politicians say the solution is to 'Just go buy and electric car', it is the modern version of 'Let them eat cake'.
We know how that policy worked out.