00:00One of the things we have heard from the president and from Chevron this morning is that the U.S. oil assets and the oil assets in general in Venezuela were untouched.
00:08They're still functioning. Chevron says it's focused on its Venezuelan staff safety and the integrity of its assets.
00:15What do we know and can you bring us up to speed about what's going on with the oil?
00:19Yeah, I mean, I think, you know, the oil is a fair way away from Caracas and this was clearly a very targeted operation.
00:27I'm a little concerned about all this talk of it's it's about the oil and, you know, the U.S. is going to have a big say in what happens to Venezuela's oil going forwards for a couple of reasons.
00:41I mean, the first is that, yes, Venezuela is sitting on what are reputedly the world's largest reserves of oil.
00:49But if you actually dig into that, 86 percent of that is these tar sands from the Orinoco belt, which very few refineries in the world can process.
01:02Very few people want it. It's difficult and expensive to extract.
01:09And if we're looking at a world where all the demand forecasts say that future oil demand is going to be driven by petrochemical feedstocks and the plastics industry, Venezuelan crude isn't what you want for that.
01:24So I would just question how desirable that is.
01:31And the second thing is if you look at the countries where the West has previously been involved in regime change, and if you look particularly at Iraq and Libya, the prospects for the oil industries aren't great.
01:50I mean, we're 14 years on from the toppling of Gaddafi in Libya, and Libyan production is still 25 percent lower than it was immediately before Gaddafi was ousted.
02:04If you look at Iraq, it took 12 years for Iraqi production just to get back to where it was when Saddam Hussein was in power.
02:15And that was with U.S. boots on the ground, a largely U.S.-run administration.
02:23And if you look at the Iraqi oil industry now, who's pumping all the barrels there?
02:27It's not the American companies. It's the Chinese.
02:30And that is partly because the terms that were offered simply weren't attractive.
02:35And there's no guarantee that they would be any better in Venezuela and any more attractive to U.S. companies.
02:43And finally, of course, you know, every barrel that's pumped out of out of Venezuela is competition for barrels pumped out of Texas.
02:51Julian, we're going to talk a bit later with Terry Haynes at Pangea Policy, who points out that China is not only an important ally of Venezuela, but its largest oil customer.
03:02What does this action mean for Beijing?
03:03Well, I mean, Beijing has imported about 60 to 65 percent of all the oil that Venezuela has exported in 2025.
03:18It's an important part of China's oil imports.
03:23But if you look at where China's importing oil from, it's importing it from from just about every producer in the world.
03:31Its imports from from Venezuela have averaged something under half a million barrels a day.
03:40So if it were to lose that, that would be a hit.
03:44But, you know, if it does lose it, where does that oil go?
03:51If you wanted to rebuild Venezuela's oil industry and you want U.S. companies to be a part of that, then you want Venezuela exporting oil.
03:59It needs a market for that.
04:02I don't think this would be a huge problem for China.
04:06There's a lot of oil going into Chinese storage tanks and storage caverns.
04:11That's one of the things that has been propping up oil prices.
04:16If we saw a complete loss of Venezuelan oil, which nobody's talking about at the moment.
04:23I mean, all the talk is about how the oil industry is continuing to function.
04:27But if we were to lose it, I think what we would see is a little bit less oil going into storage in China.
04:34And I don't think it would have a huge and long lasting impact on either China's ability to buy oil or, frankly, on the oil market, which is facing a glut in most people's forecasts in any case at the moment.
04:49Jillian, I want to ask you about this line that we've heard from the administration a few times, including from the vice president and from the president, that the U.S. wants Venezuela to give back stolen oil and that that stolen oil is somehow the property of the United States.
05:06Is there any justification to that?
05:08Is there any truth to that?
05:09Where is this coming from and why does the administration think it has ownership over this oil, especially since there is a U.S. company operating in tandem with the government legally there?
05:19Why does the U.S. think it has ownership over oil that's not part of that agreement?
05:23I think this stems from the nationalization of a number of other exploration and development projects in Venezuela.
05:32I think in particular it was with Exxon, if my memory serves, that was involved there.
05:40Their project was was expropriated.
05:45And I think that this probably stems from that.
05:48But that was, you know, that was a small portion of Venezuela's oil reserves in oil production and to claim somehow that the entirety of Venezuela's oil reserves is the property of the U.S., I think is fanciful.
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