Markets rule.
Matt (Mr Global) Randolph points out that even if you buy into the “take the oil” rationale for a military regime change operation, Venezuelan oil costs $90/barrel to extract, in a world where current oil prices are $60/barrel, and falling.
Could hardly be a clearer illustration of the “greed is good” stupidity of the MAGA regime. Makes George Dubya look like Talleyrand.
Google AI overview:
Venezuelan oil is predominantly heavy and sour, meaning it is dense and high in sulfur, making it difficult to process. This “sour crude” is often mixed with lighter crudes or upgraded before it can be refined into standard products like gasoline and diesel. While some refineries, especially along the US Gulf Coast, are specifically equipped to process this heavy crude, other issues like poor quality control, high water and salt content, and lack of investment have further impacted its quality and marketability.
Key characteristics
- Heavy and sour: Most of Venezuela’s reserves consist of extra-heavy crude oil, which is dense and has a high sulfur content.
- Requires specialized processing: This type of crude needs to be processed by specialized, more complex refineries.
- Can be high in contaminants: Problems like high levels of water, salt, and metals have been reported, sometimes due to a lack of chemicals and equipment for proper treatment.
Impact on processing
- Specialized equipment: Refineries that are not designed for heavy, sour crude will have difficulty processing it.
- Blending: To make the heavy crude more manageable, it is often blended with lighter crudes or condensates.
- Upgrading: Venezuela’s extra-heavy crude can be processed through “upgraders” to create lighter, more valuable products, but these facilities have been hampered by maintenance issues and undercapacity.
- Refinery reliance: US Gulf Coast refineries have traditionally been well-equipped to handle this heavy crude and process it at a lower cost, making it a valuable resource when available.