Venezuela holds the world's largest crude oil reserves: more than 300 billion barrels, or nearly one fifth of the world's proven reserves. Despite this, Venezuela's oil production is relatively small, and has seen a sharp decrease in the last decade. This is due in part to the country's declining oil infrastructure, which has suffered from a lack of investment, but also to the sanctions imposed by the U.S. from January 2019 during the Venezuelan presidential crisis. Today, Venezuela produces less than a million barrels of oil a day; comparaively, the U.S. produces over 20 million barrels a day, and Saudi Arabia just under 11 million. Venezuela exports most of its oil production to China.
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It’s also partly due to that oil being expensive to refine and prices being low.
If a 1M/b/d is worth pumping then so is 3M
Lower prices don't necessarily mean lower margins either, lower prices also lower the costs on the supply side
US refining capacity is largely built for their sludge oil, and so even if its not the most efficient to refine, its still the most efficient for us to refine
It's not near peak because US refineries have been blocked from buying it and servicing infrastructure, it was taken over from PDVSA in 2002, and has been in steady decline since they can't manage it as well as big oil could.
Those are good points but I still think lower prices imply lower margins, other things equal.
On a per barrel basis, revenue declines 1:1 with price, while costs will decline at a lesser rate.
Is our refining capacity still enough after the shale boom? And, would it still be enough if the Feds actually open up a lot more production?
I think the margin thing actually came up on Landman recently, there's a sweet spot, obviously there's no margins if you're giving the stuff away... but short of that there's a vast supply chain that incurs the cost.
The inverse is also true, I remember when oil was over $100 the producers didnt like it because of demand destruction and inflation in the supply chain.
According to the AI's there's 1M/b/d slack in refining currently, the entire gulf coast refining apparatus is built for this shit and not currently getting it... that 1M a day is before we consider winding down Saudi (higher transport and politcal cost) and Canadian oil (higher extraction cost)
(my favorite part of this actually may be Canada losing its only leverage)
Tough break for Canada
Effectively a failed state being held together just barely by Alberta.
Common language, culture and kindred blood is all they have left... oil rug pull is the second to last chess piece before they become just another part of the hemispheric security conversation and made a state... last chess piece will be cleaning up the rigged elections/voting machines.
They don’t even really have a common language, with a bunch insisting on speaking French.
My sense is that Alberta would be willing to petition for statehood separately, long before the rest of the country.
Oh yea Alberta would jump at the chance, probably a few of the other western provinces too. Wouldn't count out New Brunswick either, errant how Vancouver and Ontario control the narrative.
The Quebecois are full of shit because they can get away with it within Canada, if there's any risk to Oil subsidy and American tourism they'll cooperate. In my experience there they all have good-enough English even if they pretend otherwise.
Yeah, I know. The same thing happens with Brazilian oil.