What a U.S. Invasion of Venezuela Would Mean for Global Oil Prices
•The Trump Administration’s military buildup near Venezuela signals potential conflict with major implications for global oil markets and geopolitics.
•Venezuela’s 1–1.1 million barrels per day of heavy-sour output are crucial for U.S. and Asian refineries; any disruption could spike Brent and diesel prices.
•A full-scale regime-change operation would destabilize the region, freeze investment, and trigger ripple effects across energy, insurance, and logistics sectors worldwide.
Military
The risks surrounding Venezuela, the world’s largest oil and gas reserves holder, are clearly skyrocketing. With Venezuela’s president, Maduro, calling upon Russia, China, and Iran to assist in a possible military confrontation with the USA, global oil and gas markets are growing increasingly nervous about a potential conflict.
The ongoing military buildup by the Trump Administration around Venezuela, officially set up to confront the country’s perceived pivotal role in the international drug trade, almost looks like the so-called military training activities of Vladimir Putin’s Russia before the invasion of Ukraine.
While no decision has officially been taken in Washington, military sources are indicating that military action or even an invasion of Venezuela has received the green light. Trump is clearly preparing for all scenarios, possibly not only reshuffling power structures in Latin America and the Caribbean but also affecting global oil markets in due course, with significant geopolitical implications involving Russia, China, and Iran. While Venezuela holds the largest crude oil reserves in the world — estimated at around 303 billion barrels as of 2023, approximately 17% of global reserves — its total crude oil production is well below expectations.
At present, the country produces around 1-1.1 million bpd, indicating a struggling upstream and downstream sector, which has been significantly hindered by factors such as international sanctions, infrastructure constraints, a lack of investment, and technical challenges in extracting and refining heavy crude oil. The country’s potential is gigantic, but reality shows a crude oil giant in despair, struggling not only to produce its heavy-sour barrels but also to export them to global markets. Primary production is currently focused on the Atlantic Basin, much of it tied to Chinese buyers and U.S.-licensed joint ventures.
Due to ongoing U.S. sanctions and internal unrest, the country is struggling, showing a significant economic and political crisis, constraining even future developments indefinitely.
While Venezuela’s total production is not of fundamental importance in terms of barrels, the country’s central, absolutely pivotal position stems from its slate-critical supply to markets. A U.S. military campaign will always include disruption or destruction of ports, upgraders, and logistics, which would lead to the removal of so much more than “just another million barrels”.
At the same time, while Venezuela’s LNG position is almost non-existent, a military action on Venezuela is expected to freeze the so-called Dragon gas tie-in to Trinidad & Tobago (feed Atlantic LNG). The latter would undoubtedly have a psychological effect on global gas markets.
Looking at Europe’s market position or exposure right now, it is mainly linked to prices, not molecules: Brent, diesel cracks, and war risk premia in the Atlantic. The U.S. would be able to cope in headline barrels (primarily through light-sweet growth), but U.S. refineries would definitely feel refinery-slate pain.
After the collapse during the late 2010s, Venezuelan crude output has shown some rebounds. During 2024-25, it increased production again, mainly through selective licensing and Chinese demand. Still, the country produces only 1-1.1 million bpd, of which about 1 million bpd are crude exports.
While volumes are low, quality here puts Venezuela in the spotlight. As the prime exporter of heavy-sour grades and extra-heavy Orinoco blends, it provides precisely the feed that high-complexity cokers and hydrocrackers in the U.S. Gulf Coast (USGC) and parts of Asia are built to process.
If Venezuelan production slips or breaks down, refiners will be forced to use fuel oil/resid imports as a substitute feedstock. So far in 2025, USGC plants have been calling upon Middle Eastern and other residual streams.
At this point, some form of military action is expected, with the main concerns centering on the approach taken. In a limited strike/naval blockade scenario, the physical effects will mainly affect export terminals (Jose), with some damage to upgraders and storage. Insurance premiums will jump, while risk-averse crews and war-risk underwriters will leave. Immediate effects are apparent: Brent will spike, and markets will see a higher heavy-sour premium vs. light-sweet. Diesel cracks are expected to jump too.
With a sustained campaign (months) targeting industrial sectors, the main damage is expected to be to upgraders (Petropiar/PetroMonagas), while logistics is also constrained. Export volumes are down. In this scenario, markets can expect structural heavy-sour deficits in the Atlantic Basin, but OPEC+ could partially offset headline barrels. The primary concern, however, will be a significant quality mismatch, leading to higher diesel prices in Europe and suboptimal diesel yields at USGC refineries, highlighting the potential for long-term effects of the situation.
The primary concern, however, is that the Trump Administration will pursue a regime-change/occupation scenario. That would result in full-scale destabilization, capex freezes, and a breakdown in diluent and naphtha logistics. In this scenario, restoring the oil sector would take 12-18 months, and billions of dollars would be needed to revamp and upgrade.
The above means a significant risk to markets, even if some believe there is an oil glut or too much oil on the water. Venezuela’s million barrels count for more than only numbers, as refiners don’t run spreadsheets but units.
Trump’s advisors should address the fact that heavy sour molecules deliver coker feed and diesel yields that light tight oil cannot perfectly replace. He should also look back over the past few months, as the USGC has witnessed a surge in fuel-oil imports intended to backfill constrained Venezuelan and Russian heavy oil supply.
The results for the U.S. are precise, but some should also be looking at Europe. As Europe buys globally priced barrels, any changes in Venezuela have a direct impact on industry and consumer prices.
Since the Russian invasion of Ukraine in 2022, Europe has leaned heavily on U.S. diesel and gasoline, as Russian products were sanctioned. Any change in U.S. refinery output will lead to higher product import bills and diesel premiums in Europe. Yes, Middle Eastern diesel and Indian exports could fill some gaps, at a price, but the outcome of new U.S. and EU sanctions on Russia still needs to be assessed. Trump’s war on 3rd party Russian oil products has just started.
As some have already stated, every slate-specific shock shows that headline global balances matter, but molecule chemistry, geography, and insurance matter more in the first 3–9 months of a conflict. For European parties, it would be a smart move to start diversifying product sourcing, having vast inventories of certain quality, and assessing necessary logistics and insurance issues.
As in the case of Ukraine, the signs are on the wall, moves are being made, it seems not to be the case “IF the USA will act on Venezuela, but more WHEN”. Any assessment of these developments should also take military strategy into account. As von Moltke stated, “No plan survives first contact with the enemy,” or Dwight D. Eisenhower, “In preparing for battle I have always found that plans are useless, but planning is indispensable”, preparation is needed. Still, the outcome of any further action by the U.S. on Venezuela is unclear. A full-scale military operation could easily bring in unwanted 3rd party responses, especially Russia, China, or even Iran.
A removal of the Maduro regime would entirely undermine Russia’s Vladimir Putin’s planning. At the same time, it uproots part of the growing influence-and-power game China is currently playing in Latin America.
Iran is a Dark Horse, as the Tehran regime holds strong economic and military ties to Caracas. Looking at news emerging about Russian planes delivering sophisticated weapons and missiles in recent days, a confrontation could have regional and global implications, outside of the energy sphere, too.
For those interested in learning more about the hidden understanding and meaning of these final days, I provide a link to another video regarding the true adversary as we wind up this age.
These concepts were common place 50 to 60 years ago. There were a number of learned biblical teachers who knew all about these matters. Unfortunately for those in the final day, these teachers are all dead. No one’s replaced them.
Many more people knew about these matters 200 to 300 years ago. Back then, the Jewish banking families and Freemasons were verboten and both were strongly resisted in American society.
Today’s Christian is completely clueless. I mean completely.
Descendants of Cain -Eli James
https://youtu.be/Z9EWBVr4LvU?si=KRGiMOUTwpqmNcf1
A lame duck and a desperately humiliated president Trump could throw the entire nation under the bus with a global war. He seems to show no compunction about conducting military operations in the western hemisphere.
White judeo Christians are so stupid. They think everyone’s the same. They believe that if they are just nice to their non-race, the people will like them. How stupid. I recall all the previous readers on my blog who thought that way. I don’t think they’re around anymore.
What do you make of Majorie Taylor Greene going on that anti-American show-“The View” and the timing of appearance.
Interesting. Even though the states that were up for reelection were already blue and Democrat, sweeping victory didn’t help President Trump. I think the one Republican loss, the attorney general race in Virginia was the big one.
I know she mentioned about perhaps running in 2028. She’s covering her bases and she smells weakness with Trump. I think Trump’s methods are quickly dying on the vine. If Trump doesn’t change his way of operating, the Republicans are being set up for a big loss in the next presidential election. Moreover the Democrats will be able to win with a far left agenda as the antithesis to Trump’s four years.
In some regards, if Trump can unwind the tariffs through the Supreme Court, he may actually be better off. I’m not saying the country will be better off as I have to conclude the tariffs are wise decision. But people are growing impatient with price inflation. Taylor green sees opportunity.
I didn’t know she was on The View, but I think that’s actually an intelligent decision on her part.
It is very possible that it is part of the plan that Trump is set up to make the Republicans look bad and pave the way for ultra leftist democrats to win big in 2026 and win a trifecta in 2028. I think there is a strong possibility that Trump will throw the Republicans under the bus. He certainly did that after the 2020 elections. The trend towards “You will own nothing and be happy “ (I.e. communism) is still in place. Tuesday’s elections are a warning to that effect especially when a violent minded candidate for attorney general wins an election against a popular incumbent.
It amazes me that the Democrats come up with all these votes. I expected closer losses by the Republicans and maybe a Republican win in New Jersey and Virginia Attorney general.
There are two ways the Democrats win:
1) Energize the dumbed down masses to register to vote for them.
2) Stuff ballot boxes
If the above option isn’t enough.
After Trump the Democrat Socialists will be back in power with a vengeance. Last Tuesday’s election should be a warning. In addition don’t forget the 2022 midterm elections when that hyped up Red wave didn’t materialize. I am conservative but I feel the Republicans are on the wane.
Stone, how do you feel about your home state going full tilt blue? Are you considering leaving Virginia for a red state? Does that change your outlook on your real estate investments in Virginia?
Thirty five year’s ago I have considered moving to Virginia because in those days it was more conservative except for communist Fairfax County. These days I would not care to live in Virginia considering they consistently voted for democrat presidents since the mid 90s. Virginia is clearly a blue state after yesterday. I would avoid Virginia like the plague along with NY and Massachusetts.
I have to admit Winsome Sears was not spectacular and I feel a lot of rural conservative white folk stayed home as they probably would not care for a black female. Seems like black republicans are real losers as even their own kind would not support them never mind conservative rural white folks.
I heard somewhere that the Democrats will agree on a budget after yesterday’s election as they didn’t want to compromise before the election and turn away some voters. It will be interesting to see if the government will reopen soon. On the other hand, the Democrats may be emboldened to harden their position on healthcare for illegals and paying for sex change operations.
It seems like the Red areas in the USA are rapidly shrinking. Conservative Christians will be in for it in these last days.
I would be surprised if Trump compromised on the budget. I think he understands this and is willing to go months without an agreement.
As for Virginia, I wouldn’t recommend moving here. Not anymore. While Virginia has traditionally been a very business friendly state, and the CNBC poll regularly puts Virginia as the number one state for conducting business, I don’t see that lasting. I envision a kind of hybrid forming here in Virginia and the schvartzes will be the excuse to turn it into a Maryland on training wheels.
With this said, the current Republican governor, Glenn Younkin, has been viewed very favorably here in the state. If he were allowed to run again he would have beat any challenger. In fact, the exit polls indicated that Youngkin’s favorable rating of 55% was much higher than either of the two candidates running. Unfortunately, he’s constrained only one term.
My concern for real estate investors in Virginia is that the Democrats may try to implement friendly tenant laws designed to protect the tenants. This could be similar to what we already observe in Maryland.
Maryland’s real estate prices have been struggling concomitantly to their pushing through tenant friendly regulations. Investors have been largely steering clear of Maryland and specifically, the black majority areas for this reason. I am concerned that we could see something similar transpire in virginia.
For survivalists who read this blog, I do not recommend Virginia.
I hear you. New Hampshire used to be solidly red until the mid 90s and has gone downhill since as the schvartzes from MA and NY move here. I don’t recommend New Hampshire as safe for conservative Christians. However New Hampshire is a lot more moderate and business friendly than Massachusetts and Vermont. Maine sucks for conservatives too especially if that no name Oyster farmer gets elected senator.
The Virginia and New Jersey democrat governors elect claim they are moderate. Moderate democrats are a huge misnomer as they get pulled by the radical leftists and end up pandering to them. Whenever a Democrat gets elected the left wing gets things their way and the area goes downhill fast. Democrats are thugs pure and simple.
Biden and Clinton campaigned as moderates and once they got into office they got controlled by the leftists.
It is much easier for me to tune out and say it doesn’t matter but it will matter when these thugs come knocking on my door with search warrants asking about my vaccine status or asking about my guns. These assholes invade your private space. That day is coming as soon as Trump is out. They also make it very difficult to legally conduct business unless you adhere to their strict mandates.
What states do you recommend now?
AR, ID, KS, KY, MO, MT, NE, NV, NC, ND, OK, SC, SD, TN, TX, UT, WV, WY.
And in these states, it’s only in certain areas. For instance, in MO, it’s in the southern tier in the Ozarks. The same with AR. Of course, in TX, it’s in Western TX where there are less blacks and less population. I always thought Amarillo was okay. Been through that city a dozen times.
Western KS is okay, as is Western NE panhandle. WY is good, too. Away from Cheyenne. I have been there a number of times and don’t care for the nuclear missiles and the transient nature of the interstate 80/25 crossing. It brings vagrants and other trouble makers.
Rural KY and WV though these areas are tough to live in.
NC/TN along their contiguous border in the Blue Ridge area. Not Asheville. I went there a couple times and the city is faggot central.
I actually like the Reno area. Great place to live and easy to build a big out area in the Great Basin area and such. Though Reno would be overrun by the CA faggots in times of peril.
Some rural areas of the rust belt are great for those with little money who are already checking out spiritually, so to speak. These areas have lots of cheap housing with basements and large lots.
In South carolina, I would recommend the upstate region north of i-85. That area kind of bleeds into that Northeast Georgia.
“Control oil and you control nations. Control food and you control the people.” Henry Kissinger
Henry would be proud!!!!
Repo markets going crazy as bank reserve balances continue to dwindle. The reverse repo window is depleted as previous lenders to the Fed are now feverishly borrowing.
QE or some sort of mongrel offshoot will be announced. A mongrelized population needs a mongrelized monetary policy to support its twisted economy.
I’m looking forward to a kayfabe Mamdani win. Trump provides the catalyst and the mongrelized population respond with outlandish results.
I lived in Manhattan for 15 years after growing up on LI and it’s wonderful to see how quickly NYC has devolved after Bloomberg left the mayor’s office. Blacks and other white-hating mongrels have no true platform, except to upend the “white oppression”.
I will enjoy watching!
I have a feeling there will be riots in NYC if Mamdani loses and accusations of election fraud because all the mongrels are hyped up for a Mamdani win to stick it to the white rich folk and get all the free stuff.
“Nothing is so defeated as yesterday’s triumphant Cause.”
After the Synagogue of Satan gets all they want. Then what?
The 1973 movie, Soylent Green, envisioned this for NYC 50 years into the future in 2022. I guess the writers were off four years. 🌚🌚🌚✡️✡️✡️
A Mamdani win will turn Soylent Green into reality.
The Trump trades are unwinding as it seems Democrats will be taking some higher profile races.
The U.S. Treasury’s cash balance, held in the Treasury General Account (TGA) at the Federal Reserve, currently stands at approximately $1 trillion.
Context of the “Stockpile”
•Operating Cash: The TGA functions as the U.S. government’s primary checking account, used for receiving tax payments and proceeds from debt auctions, and for disbursing government expenditures. The cash balance naturally fluctuates daily with these inflows and outflows.
•Historical Levels: The TGA balance reached a peak of approximately $1.6 trillion in 2021 as a result of increased government borrowing during the COVID-19 pandemic. It can drop significantly during periods with a binding debt ceiling, such as in mid-2023 when it fell as low as $50 billion.
•Current Level: A balance around $1 trillion is a relatively high but manageable level, built up through recent borrowing to ensure the Treasury can meet its obligations without running out of cash, especially following the resolution of the debt ceiling standoff in mid-2023. The Treasury aims to maintain a sufficient buffer to cover upcoming expenses and manage cash flow effectively.
•Market Impact: Fluctuations in the TGA balance can affect overall liquidity in the financial system. When the Treasury builds up its cash balance, it effectively drains reserves from the banking system, which can have a tightening effect on financial conditions.
Given the current government shutdown, one of my tenants in one of my houses had notified me about a week ago that she may not be able to make rent for November, because she was concerned she may not get paid.
She and her roommate are both actively enlisted in the military and receive a housing allowance. The rent is about $3,100 a month. However, she notified me on the 31st that she got paid and rent would be paid. It’s already been paid now and the mortgage has been paid as well. It’s a great Cash cow.
If someone is going to rent out to federal employees, it’s best that the tenants are in the military.🤑🤑🤑
I mentioned a few articles back they are gonna get that oil price up, thought there would be a dip event first, before the uptick. If oil goes up, EV stocks should start going up in an opposite correlation. $37200 a year on just rent, man i’m glad I don’t live in that area, but it’s been slowly creepin up.
USA, Inc would rock with a high oil price. USA, Inc is the energy powerhouse, producing 13.2 mm bpd last year. It’s also the largest nat gas producer as well. Total petroleum liquids produced by USA, Inc totals about 21-22 mm bpd. Venezuela’s oil output is stuck at roughly 1 mm bpd.
Which country benefits the most from a price spike? Not Russia, it’s USA, Inc. Putin Russia is as corrupt as Venezuela. Years of malinvestmemt has hurt Russia’s industrial complex. Once Western money left Russia, its production capacity has fallen at least 2-3 mm bpd.
EV stocks could see a reaction to the upside, but without government assistance and subsidies, these clean energy stocks are inefficient pigs. However, like you intimate, these stocks could be an excellent trade. I think uranium stocks could see renewed vigor.
Ten years ago, the house rented for $1,875. It’s a 5 bed 3 bath house on .35 acres in Largo MD, near Andrews Air Force Base. Today, a 1 bed 1 bath apartment rents for that.