[rockdoc123]

Yes, simple they have lots of oil. Our oil companies want that oil to sell mainly to the West.

Not this BS again. As has been pointed out previously the oil that has been exported from Venezuela to the US is heavy or a blend of heavy and medium. The amount that the US imports from Venezuela remained in the 20,000 to 40,000 bopd through the nineties and up until the recession. Since then the inept handling of Venezuela's oil fields by Chavez and then Madura resulted in less and less production and ever decreasing imports from Venezuela. The US has no need for Venezuela oil, they can get all the heavy oil they will ever need from Canada by simply debottlenecking some pipelines. Currently, they do not need that heavy oil, even with Venezuela imports being at an all-time low.

This is the same lefty nonsense that was espoused over the Iraq war with the righteous left claiming the war was all about oil and that the US wanted Iraq oil for themselves. As it turned out no US company gained a concession from Iraq post-war whereas BP, Total and other European companies did. If the US was so enthralled with Iraq oil then why did they end up with none of it? Answer is...it was never about the oil.

The law in Venezuela has oil owned by the State. Foreign companies can participate in the industry (at least they could before Chavez started to re-nationalize the industry) but they cannot own the oil. They could have the right to lift oil and sell it if they desired but at no point would they be able to repatriate those molecules back to the US. They would be forced to sell to the open market.

[onlooker]

Looks like Russia is saying no invasion for you US
https://www.reuters.com/article/us-vene ... LBkmTdx7aQ

[Cog]

I'm glad Russia warned us about grave consequences but they really couldn't stop a US intervention if we wanted to do one.

[onlooker]

They have tge "World's largest reserves" So, there's still enough recoverable oil for another decade or so. And extra heavy mixes well with extra light to feed into the existing refineries. Excess sulphur can be addressed by just tossing out air quality rules. (If you don't think that will happen in a "transportation emergency"...)
They're going to get Venezuela's recoverable oil, even if it's a small fraction of the theoretical reserves, and the people of the country be d*mn*ed.

[rockdoc123]

They're going to get Venezuela's recoverable oil, even if it's a small fraction of the theoretical reserves, and the people of the country be d*mn*ed.

I'm sure you were claiming the same thing for the war in Iraq, how did that work out for you?

Please tell us all exactly how you see this working. Let's ignore the fact the US does not need or for that matter want any more heavy oil from Venezuela given they have as much as they will ever need available to them from their best trading partner who is not socialist and speaks the same language (more or less). The oil is owned by the people of Venezuela by decree. The US or anyone else for that matter can't just show up and take something that isn't theirs, the international court of law would have something to say about that. If Madura leaves and Guaido becomes President he has stated the industry would be opened to international oil and gas companies again. What that means is competitive bid rounds and those are open to public scrutiny just like everywhere else in the world, meaning US interests would not have a leg up. Just like in Iraq where the open bid rounds saw many companies with the exception of US companies winning bids to participate in oil and gas operations.

[Newfie]

Rock123,

Not to derail to far but if Iraq was not about the oil, a position widely held, then what was it about? I ask because I’m completely confused about our ME policy, most recently Syria, which makes zero sense to me.

[rockdoc123]

Not to derail to far but if Iraq was not about the oil, a position widely held, then what was it about? I ask because I’m completely confused about our ME policy, most recently Syria, which makes zero sense to me.

I suspect there are others who understand the politics better but I suspect you can't separate Gulf War I from Gulf War II. Gulf War I was a response to Iraq invasion of Kuwait which was seen as having the potential to destabilize the whole region. No doubt the US felt pressure from its allies in the region and more specifically Saudi Arabia. Iraq's continued resistance to weapons inspection and cooperating with the United Nations following the outcome of Gulf War I resulted in the US finally losing patience. The US position was likely influenced by 911 to some extent, again there are folks here who know the underlying politics better than me. But it is clear it had nothing to do with oil given most US companies didn't bother to bid on blocks during the first bid round following cessation of hostilities and any that did failed to win any. If it was about oil the contracts would have been disseminated amongst US companies and other countries who were part of the "willing". In fact, contracts were awarded to Russian, Chinese, French and British companies, those countries being part of the coalition of "unwilling".

[Newfie]

Thanks for that.

It still feels a bit hollow, but maybe that is just the way it is. Maybe Bush needed a kicking boy after 911 and Iraq was convenient. Still leaves me baffled on Syria.

[Cog]

Its not so much that the USA wanted to directly seize Iraqi oil or even exploit them as a reason for the Iraq war. It was considered in US national interest that one country(Iraq) could not totally dominate Middle Eastern oil supply to the detriment of the rest of the world. Had the invasion of Kuwait not been responded to, Saddam could have invaded Saudi and the rest of the Gulf states and they could not have stopped him.

The Second Gulf war(to conquer Iraq) was optional since Saddam was boxed in and no real threat to the region as long as there was US presence in theatre.

[Revi]

Its not so much that the USA wanted to directly seize Iraqi oil or even exploit them as a reason for the Iraq war. It was considered in US national interest that one country(Iraq) could not totally dominate Middle Eastern oil supply to the detriment of the rest of the world. Had the invasion of Kuwait not been responded to, Saddam could have invaded Saudi and the rest of the Gulf states and they could not have stopped him.

The Second Gulf war(to conquer Iraq) was optional since Saddam was boxed in and no real threat to the region as long as there was US presence in theatre.

I have heard that one reason was to get a voting seat on OPEC. Venezuela has a voting seat as well, so it may be useful for that. I think what we are doing is driving up the price of oil so that producers make more money, which includes us with shale oil, Saudi Arabia and of course, Russia...

[KaiserJeep]

Oil is oil. When traded on a (more or less) free marketplace, the ultimate source country and the ultimate destination where the oil is consumed are not very relevant. The mere presence of quantities of oil effectively manages the price, as demand and supply for different grades of petroleum balance out over time. During this war we were buying oil from Canada, Mexico, Venezuela, the Saudis, etc. Saddam was more or less powerless to effect the US supply of oil other than by destroying wells and pipelines - which he did, which polluted his country and the Persian Gulf, but was ultimately a futile act.

In actual fact, as long as various Middle Eastern countries attack each other's refineries, the US economy benefits. The practice of importing crude and exporting refined petroleum products is not the optimal one for the MidEast, but it does prop up the American oil business handily.

[Tanada]

Thanks for that.

It still feels a bit hollow, but maybe that is just the way it is. Maybe Bush needed a kicking boy after 911 and Iraq was convenient. Still leaves me baffled on Syria.

Syria was a direct result of HRC and her obsession with the 'Arab Spring' movement to replace authoritarian regimes unfriendly to the USA in Africa and the Middle East with 'Democracies' friendly to the USA. The overthrow of Qaddafi in Libya was the start of that sort of thinking followed by the fall of Mubarak, who had been a pretty friendly Egyptian leader for decades. Mubarak was in failing health so many in the Administration saw replacing him with an even more friendly 'leader' as being advantageous. From there the next domino that was expected to fall was Syria, and the obsession was such that even though known terrorist groups had moved in on Libya and stripped their advanced weapons arsenal wasn't a plain enough indicator for the obsessed. HRC and her clic at the State department insisted on sending arms to the 'rebels' in Syria despite the fact that many if not most of them were the same type of terror actors who had been causing trouble for decades in the region. Thus ISIS was born, armed with US sanctioned if not directly shipped advanced weapons.

Syria however has been a long standing ally of Russia and has provided them a key port for repair and rest in the Mediterranean Sea. When Russia started making noise about our 'intervention' we encouraged trouble right on the Russians doorstep. Whether the HRC theory was 'take away the Russian Black Sea Fleet and they would have no reason to care about Syria' or some variation remains unclear to me, but their actions were foolish, stupid and dangerous all at once.

Around this time the Ukraine went through a coupe de tet sanctioned by the USA/NATO to throw out the elected leadership and replace them with persons friendly to the USA/NATO and hostile to Russia. Worse those forces attempted to strip the Russians of long standing naval base on the Crimean that was a vital national interest to Russia. How would we react if Russia and China sponsored Cuba to forcibly take over Guantanamo Bay and make it a Russian/Chinese port of call and military base? Well Russia felt exactly the same way when the USA sponsored a Russian hating coup de tet in Ukraine. When the local population resisted being forcibly suppressed by the new 'government' in Ukraine it essentially lead to a civil war with Russia on the side of those resisting the coup de tet, hence the many pages of blather in the archive here on the 'Ukrainian Crisis' beginning in 2014 and lasting well over a year https://peakoil.com/forums/russia-ukraine-crisis-pt-1

The thing is once the Obama Administration lost the Senate in 2014 (change of control January 2015) there was a lot more restraint on what President Obama was comfortable trying to get away with internationally, and even more so HRC was focused wholly on the Presidential Campaign. So USA covert support of ISIS started dropping off right at the same time Russia had had enough shenanigans and was sponsoring both Crimean annexation and Syria against the 'rebels' who were USA proxy forces.

[KaiserJeep]

A nice summary, Tanada. I would add that you give Obama too little credit for incompetance, he was a novice politician and only made it as far as journeyman before his career ended.

[Revi]

I guess we are moving on to Iran now. I guess we are not at war with Eastasia, now we are at war with Eurasia.

[onlooker]

I guess we are moving on to Iran now. I guess we are not at war with Eastasia, now we are at war with Eurasia.

And we have always been at war with Eurasia
Seriously, plainly clear this is about the oil and protecting the Petrodollar. US will be in a world of hurt if the world for the most part abandons it. And that is what has been in the works spearheaded by Russia, China and Iran. A subsitute Oil Bourse ( market), pricing oil in other denominations including the Yuan. And buttressing against the consequent collapse of the US dollar by pegging oil and currencies to Gold. This is thus a major threat to the US Economy obviously. Thus the aggressive belligerence and threats to Iran and Venezuela as major oil exporters or at least potential ones.

[Cog]

The amount of dollars used in the oil trade daily is insignificant to the dollars in play in worldwide equities and bonds. Oil could be traded in penguin feet and it would not affect the USA in the least. The dollar is safe for reasons that have zero to do with oil.

[Newfie]

Hospital ship deployed.

As tensions with Venezuela mount, the United States is planning to announce on Tuesday the deployment of a military hospital ship to the region, U.S. officials say, in the latest sign of the Pentagon’s limited, and targeted, involvement in the crisis.

The officials, who spoke on condition of anonymity, did not specify where in the region the ship would travel to. Last year, a hospital ship — the USNS Comfort — cared for Venezuelan refugees and others as it stopped in Colombia, Peru, Ecuador and Honduras.

https://gcaptain.com/us-deploy-hospital-ship-venezuela/

[Revi]

I wonder what is going on? Is this just some kind of a gambit to keep the price of oil up? If it is we are playing quite a game. I can't see getting into a real skirmish in Venezuela, but I guess it's possible. How much useable oil do they really have anyway?

[KaiserJeep]

Venezuela has the largest proven reserves in the world. By which I mean, using the standards of the Western World, versus SA, where the King decides what figure will get published. The Russians use their reserves figures to manipulate financial markets, and just about everywhere, the accuracy of reserves is questionable because somebody somewhere has an agenda you don't know about.

Venezuela before Chavez nationalized all the petroleum was using US standards to state reserves, because there were US companies there drilling. Since actual production tanked shortly after nationalization, those should still be good figures. In actual fact as more years pass, the petroleum still in the ground gets more valuable, and Venezuela looks like a ripe and attractive fruit, ready to pluck.

Whoever plucks it gains a huge prize. But there is a little thing called the Monroe Doctrine...

[rockdoc123]

By which I mean, using the standards of the Western World, versus SA, where the King decides what figure will get published.

Pay attention, those reserves have been recently audited and published, justifying the numbers Aramco has been speaking to for some time.

and just about everywhere, the accuracy of reserves is questionable because somebody somewhere has an agenda you don't know about.

not true for publicly traded companies who are subject to annual reserve audit and serious punishment (fines and jail sentence for executive) if found to be manipulating reserves or financials. This is serious business since the implementation of Sarbanes Oxley.

Venezuela before Chavez nationalized all the petroleum was using US standards to state reserves, because there were US companies there drilling.

Its much more complex than that. Venezuela was first nationalized in 1976 and it wasn't until the mid-nineties that the government allowed foreign investment in oil. There was only a two year period before Chavez took power and gradually usurped much of the control over oil including getting rid of anyone at PDVSA who he didn't like. From 2002 through 2007 the large US companies in Venezuela would indeed have been subject to SOX provisions so they would have adhered to the Reserve Reporting rules as suggested by SEC, AAPG, SPE etc. After Chavez expropriated their holding in 2008 there was virtually nothing that happened to the oil industry other than production so actual reserve calculations would have been extremely simple. Also PDVSA had issued a bond which, of course, would have required disclosure of reserves and because it was a US based bond it would require annual reporting. So the information regarding actual reserves is pretty good. What is missing is what actual spare capacity is at this particular moment given the lack of maintenance in field facilities and central processing plants.