Let's talk about Trump, oil, and the costs in Venezuela not adding up.... - Belle of the Ranch

[TexasTowelie]

Well, howdy there Internet people. It's Belle again. So, today we're going to talk about Trump, oil, and the costs in Venezuela not adding up.

So, Trump has started gloating about the tens of millions of barrels of oil he says that Maduro's deputies, who are still in power, will give him. Of course, the announcement came out on social media. "I am pleased to announce that the interim authorities in Venezuela will be turning over between 30 and 50 million barrels of high quality sanctioned oil to the United States of America. This oil will be sold at its market price and that money will be controlled by me as president of the United States of America to ensure it is used to benefit the people of Venezuela and the United States. I have asked Energy Secretary Chris Wright to execute this plan immediately. It will be taken by storage ships and brought directly to unloading docks in the United States. Thank you for your attention to this matter.”

First, let me start by saying that Venezuela doesn't have high quality oil. It has heavy sour crude. But this announcement has been cheered by people as some kind of major win. Setting aside the potential legal issues with this, 50 million barrels actually isn't a lot. It's about 2 and 1/2 days of US demand. With the current price, it's a little north of $2 and half billion dollars. Do you know what it costs to have the USS Ford down there? Somewhere between 6 and $6.5 and $8 million a day. That's not combat operations. That's just it chilling there. It was ordered to the area around October 24th. So, we're already looking at a half a billion, but it's likely more because the Ford is on an extended deployment coming to the coast of Venezuela straight from the Med.

Then you have to add in the cost of stationing a carrier off the coast for the foreseeable future which is the plan according to the Trump administration. Forget influencing the country at some later date. Just importing the 50 million barrels will take months, which will put just the carrier cost at over a billion dollars. Then you have to add the cost of the one-way drones, the fuel for the 150 aircraft deployed during the strike, the cost of their munitions, and then add in whatever he means by saying oil companies will be reimbursed. Well, you suddenly understand why Trump had a string of less than successful businesses.

And that's before you add the human cost, which appears to be almost 60 people. And there were seven US service members wounded. Reminder, we aren't supposed to be running P&L statements on military operations, but here we are.

Now, oil companies are baulking at Trump's plans. Why? Because analysts are saying just to keep up the measly production of just a little more than 1 million barrels per day currently being produced, which is around what North Dakota does, it would take more than $50 billion in investment over the next 15 years. To get up to 3 million per day, it would take more than $180 billion going out to 2040. Nobody in their right mind expects the current situation and government to remain for the next 15 years. How much will they invest before it's nationalized again?

Reminder, Biden got the US up to an all-time high when it comes to oil production. Oil prices are down to the point where it isn't incredibly profitable for US companies to produce. Remember, US companies are shutting down rigs and laying people off. We don't actually need more production.

Anyway, it's just a thought. Y'all have a good day.