The U.S.-led capture and removal of Venezuelan dictator Nicolas Maduro has left a vacuum for control of the vast Venezuelan oil reserves. For now, President Donald Trump says "we are in charge" of Venezuela while the country's leadership is in flux. What that means for the country's oil remains to be seen, but the markets are watching closely. "Venezuela is the largest single holder of proven oil reserves on the planet, if you just take it country-by-country, in excess of 300 billion barrels," says Karr Ingham, president of the Texas Alliance of Energy Producers.
Already, the world's largest oil companies are moving to gain access to that Venezuelan mother lode. Oil and energy stocks surged on the first full trading day after Maduro's arrest, with companies like Chevron reportedly ready to invest billions in Venezuela. At the same time, the price of crude only rose about a dollar, but remained historically low at below $60 a barrel.
Ingham says the market is in wait-and-see mode for now. "I see very little impact short-term in terms of prices for consumers or crude oil prices," he tells KTRH. "The longer-term question is if, and how, and how soon, this 300 billion barrels of oil begins to be developed and put to use."
As for the impact on the Texas oil industry, Ingham sees this as a possible boon. "The type of oil that comes out of Venezuela is this heavy, sour stuff, and we've got a lot of refining capacity along the Gulf Coast that is well suited to that," he says. "The impact of this could be that those Venezuelan crude exports currently going to China get redirected to the United States and the Texas Gulf Coast."
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