Chat with us, powered by LiveChat
Politics

Saudi Oil Shock Shows Wisdom of Trump Venezuelan Oil Waiver

Trump wisdom Venezuelan oil waiverPresident Donald Trump’s decision to grant waivers to U.S. oil interests from Venezuelan sanctions looks particularly brilliant in light of the recent attack on Saudi Arabian oil refineries which temporarily shut down the availability of more than 5 percent of the world’s oil supplies.

Given the United States’ status as the world’s top oil producer, the impact on America is less than in China which has become increasingly dependent upon Saudi oil supplies.  In 2018, China was the top overall importer of oil in the world with Saudi Arabia being the Middle Kingdom’s second largest oil source. Overall in 2018, the Middle East exported more than $107 billion of oil to China, out of the overall $239 billion they imported, meaning 44 percent of China’s oil imports were from the Middle East.

Somewhat surprisingly, the United States remains the second largest importer of Saudi oil with Canada topping the list, Mexico coming in behind Saudi Arabia and Venezuela fifth just behind Iraq.  The United States, which currently exports nearly as much oil as it imports, gets 55 percent of our foreign oil from Canada, Mexico and Venezuela.

Why does this matter?

Venezuela has the largest known oil reserves in the world.  Middle Eastern oil supply line fragility puts the Chinese economy at extreme risk.  While last year Venezuela supplied about $7 billion of oil to the Chinese, abandonment of the United States’ integral position in Venezuelan oil production would open the door for the Chinese government to grab, along with the Russians, the primary position in the huge Caribbean oil fields, utilizing their possession of the Panama Canal to easily create a non-stop flow of their economic lifeblood.

Add to the Chinese immediate interest in dramatically expanding their Venezuelan oil supply line, a recently released report on Russia’s increased influence in Venezuela and you have a double warning shot proving the wisdom of the Trump oil sanctions waiver.

The Atlantic Council report details Russian President Vladimir Putin’s ongoing and increasing interest in establishing Venezuela as a forward threat to the U.S.  The study found that, “Kremlin policy seeks to undermine the international liberal order by supporting a friendly authoritarian ruler fraudulently ‘re-elected’.”

This influence extends to military, economic and direct support for the flagging Venezuelans oil industry where the Atlantic Council reports, “Under Kremlin guidance, Gazprom and other Russian hydrocarbon firms formed the National Petroleum Consortium, which in 2010 signed a contract with Petroleos de Venezuela to set up a joint venture to extract heavy oil reserves in the Orinoco River Basin. In 2014, Rosneft, the largest oil producer in Russia and the number two gas producer, bought out Gazprom and the other Russian firms to take control of the National Petroleum Consortium.  Led by Putin intimate Igor Sechin, Rosneft’s activities frequently reflect the Kremlin’s geopolitical ambitions. Rosneft’s role in Venezuela was to provide a major subsidy to the government in the form of $6.5 billion in loans to Petroleos de Venezuela (PDVSA).”

While the Venezuelan government has not been able to provide more than half of the oil which underlay this subsidy, Russia continues to double down in their support for Maduro even as the economic conditions continue to crumble in Venezuela. It is clear that Russia, with their own robust petroleum industry, will move, along with the Chinese to fill any void created by a U.S. government mandated withdrawal of U.S. companies.

On top of the obvious need to prevent hostile foreign powers from gaining a stronghold in the Western Hemisphere, America cannot plan for a successful restoration of Venezuela without the ongoing involvement of U.S. energy companies.  These companies have decades-long presence in this now desperately poor country.

As Venezuela moves forward beyond Maduro, these companies will be crucial partners in the revival of the economy by helping to ramp-up energy output, rebuild the infrastructure of the nation, and provide humanitarian relief. The oil fields in Venezuela, if properly managed and further developed, could match or exceed those of the Permian Basin in Texas, and now is the exact wrong time to abandon them to the Russian and Chinese interests which view them not only as an expansion of their global footprint, but as a source of future reliable energy wealth.

President Trump has been right to extend the waiver for U.S. energy companies to operate in Venezuela, and now he would be wise to extend these waivers indefinitely to create a certain offset for Chinese and Russian influences in this geo-politically important South American country.

Reprinted with permission from - Daily Torch - by Rick Manning

If You Enjoy Articles Like This - Subscribe to the AMAC Daily Newsletter!

Sign Up Today
Read more articles by Outside Contributor

43
Leave a Reply

21 Comment threads
22 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
32 Comment authors
  Subscribe  
newest oldest most voted
Notify of
BajaRon

It is such a shame that Trump gets little or no credit at all from what passes as America’s ‘News Media’. The American people are being lied to simply by the lack of honest reporting from these agencies. Let’s leave propaganda to the communists. Unfortunately, it appears that we are doing exactly that.

Cheryl Filippone

Smart business man and President.. always looking out for the American people..

Wayne

“”America cannot plan for a successful restoration of Venezuela without the ongoing involvement of U.S. energy companies. These companies have decades-long presence in this now desperately poor country.” take notice “now desperately poor country!” This is what happens when socialism take over a country countries! One more point “socialism is just a nice name for communism!”

Mimi

President Trump’s common sense approach to running our government is what frightens the left, and the swamp!! He runs the country like a well run business. The left runs it like socialists, a place to grab and spend our money on whatever they choose because they feel the american public is too dumb to understand. Well especially now that we’ve had a taste of a common sense, do what’s best for our Country President, it’s going to be hard for us dummies to accept “ business as usual” in the future!! Now that we’ve seen that it can be done, we’re going to expect the next presidents to follow President Trumps lead. It can be done even if they all hate the president! President Trump goes forward with his plan to make America great again no matter what the left and their fake news media throws at him. Go Trump… Read more »

Glenn

The USA is now the worlds biggest exporter of petroleum. Why do we need the Arabs especially the ones who chant “Death to America?”

Larry

Someone pls explain why we import as much as we export? Seems the people would benefit if we just used our own oil.

Wayne D Peterkin

While I agree with the article, the attack on Saudi Arabia could have been forecast and prevented. That prevention requires necessary missile and drone defenses in Saudi targeting a threat from Iran which was deficient and the defense of all international shipping in the Persian Gulf. Iran should not be allowed near any international vessels engaged in commerce with other nations around the Gulf like Abu Dhabi, and Iranian military forces attempting to hijack such vessels should be destroyed without warning. Armed American drones and some aircraft along with allied assistance can patrol that commerce and guarantee its safety. I support all sanctions, but more needs done to counter the Iranian aggression.

michael failla

President dangerfield gets no respect. Apologies to DJT.
Seriously, dont you all get tired of the non-news from the leftist media? The new york slimes? The constant harangue from the left about how terrible the president is? To who? You and me? I dont have any issue in fact i think he does the right thing. But..But ..But he isnt “presidential” give me a break, so what? I didnt hire him to be a clotheshorse or a figure head , i didnt hire him to be a slick talker . I hired him to get things done and he has not let me down.

Linda Hutson

The Art of the Deal! Genius 🇺🇸👏👏🇺🇸

Mary

Thank you for explaining the reasons to stay active in Venezuela. It makes sense now.

Stephen Russell

Invest in Thorium reactors 2. Biofuels?
Offshore tidal & current generation undersea to shore.
Drilling offshore more.
& scrap OPEC.
Or run OPEC.

Bob walker

Get on the T R U M P. T R A I N 2020

Joe_P

Time for a renewal of the Monroe Doctrine?

Ringo Phonebone

Opening the spigot from Venezuela might not be such a quick fix. Refineries have to adjust their processes to the type and quality of crude oil based on where it comes from. All crude oil is not the same.

Clara

[ While last year Venezuela supplied about $7 billion of oil to the Chinese, abandonment of the United States’ integral position in Venezuelan oil production would open the door for the Chinese government to grab, along with the Russians, the primary position in the huge Caribbean oil fields, utilizing their possession of the Panama Canal to easily create a non-stop flow of their economic lifeblood.] Chinese government… …utilizing their possession of the Panama Canal…? Since when?

Bob L.

So, if we are producing so much oil that we are exporting a lot, then why are we importing oil??? Where is our export oil going?
Is it a political sweetheart favoritism deal that should not be? Our relationship with the Saudi royals has looong been questionable.

ex-nyorker

The USA needs to strangle both Russia & China from taking control of Venezuela oil fields, period. I trust Russia more than China, our relationship with the Russians has been good even now with the ignorant left DEMS interference. China is a preditor and will continue to try to probe weaknesses like the DEMS screwing around with our Constitutional Rights. China sees great weakness in the LEFT DEMS. Look at the idiots trying to run for the office of President. does anyone believe that any of their candidates could establish a relationship with any foreign power? I don’t see that happening, I see WWIII starting.

Bill K

Mr. Manning,
Which American oil companies are operating in Venezuela and are independent of the Venz government?

Bill K.

Bill K

Reasoning in the article confusing. Venezuela is controlled by the Russians via Cuba. Our buying their oil
only helps the Cubas need. We gave the communists Cuba now Venezuela.

JohnH

Interesting, but I thought oil production was nationalized & US companies kicked out when socialism came in. It is my understanding that the oil fields are hurting due to losing all of this oil experience. Also, China-Russia-Cuba are all communist countries that appear to be backing Venezuela . Did not know that USA companies are still operating oil fields here //// Or is the waiver just mentioned ??? Very Confusing.