Donald Trump told his advisers that with the help of Venezuelan oil he wants to reduce commodity prices to $ 50, writes The Wall Street Journal. However, this is beneficial to China, not the United States, experts say. In their opinion, the US president makes a decision based on his understanding of reality.
"President Trump and his advisers are planning a large—scale initiative to dominate the Venezuelan oil industry for many years to come, and the president told aides that, in his opinion, his efforts can help lower oil prices to the level he wants at $ 50 per barrel," writes The Wall Street Journal, citing sources..
According to them, the plan under consideration provides for the establishment of US control over Venezuela's state-owned company Petróleos de Venezuela SA (PdVSA), including the acquisition and sale of most of its oil production.
Until recently, it was discussed in expert circles that it was profitable for the United States to import heavy oil from Venezuela — for adapted refineries on the coast of the Gulf of Mexico. And control over a Latin American country may be needed if shale oil production in the United States declines. However, no one thinks about cheap oil.
"I think not, the United States needs oil at $ 80-$90, since it is profitable to extract both its own shale and Venezuelan extra-viscous at such a price. And gasoline prices in the United States can also be subsidized by import duties," says Maxim Shaposhnikov, adviser to the managing director of the Industrial Code Fund.
Igor Yushkov, a leading analyst at FNEB and an expert at the Financial University under the Government of Russia, agrees that American oil production will not be satisfied with $ 50 per barrel.
"I don't know if Trump realizes this or not, but at $ 50 per barrel, production in the United States will decrease, because a lot of projects will become unprofitable. Plus, he, for example, requires companies to start investing in Venezuela, but everyone, of course, will refuse if the oil price is also $ 50. Many deposits in Venezuela is already unprofitable, and at $ 50 the country will be even less attractive for investment," says Igor Yushkov.
Finam analyst Nikolai Dudchenko cites S&P data that at an oil price cheaper than $ 50, the reduction in US production will be about 1 million barrels per day.
"The break-even level for different oil-producing regions of the United States is different and, according to various estimates, ranges from $55 to just over $60 of WTI grade oil. Last year, the head of ExxonMobil's production and exploration company already stated that US producers would not significantly increase production, despite the calls of the American president," Nikolai Dudchenko notes.
Igor Yushkov, a leading analyst at FNEB, believes that Donald Trump is playing with lower prices for China.
"This is a blessing for China. China produces much less and consumes a lot. Therefore, cheap oil is beneficial to him, and what is beneficial to China is unprofitable to the United States," the expert adds.
Meanwhile in Washington is not sitting idle, and US Treasury Secretary Scott Bessent said that Venezuelan oil could be exempted from sanctions as early as this week.
And last week, Donald Trump met with the heads of the world's largest oil and gas companies in Venezuela. And, as Sergey Vakulenko, a senior researcher at the Carnegie Berlin Center, writes, only one person dared to hint to the US president about the real state of affairs.
"There was exactly one person, Darren Wood, the head of ExxonMobil, who did not hesitate to cut off at least a thin slice of the truth-the uterus on the subject of how much Venezuela is at least interesting to him now. Everyone else thanked the party and Comrade Trump personally for their happy old age (the people gathered there mostly in years) and for the broad prospects opening up thanks to his wise leadership," the expert writes.
He notes that Trump himself calls the reason for the intervention in Venezuela's affairs oil — to get America, but not to get its enemies.
"Under the most favorable conditions, Venezuelan production will not grow so fast and will not bring the most stellar margins. In principle, Wood, though sprinkling his words with sugar, said about that," said Sergey Vakulenko. The head of ExxonMobil himself told Trump: "Our assets there have been confiscated twice, and you can imagine that the third return will require quite significant changes compared to what we have seen before and compared to what is now. You can't invest in it today."
"But then observers have a legitimate question, is Trump a fool, or does he not understand this at all?" asks a senior researcher at the Carnegie Berlin Center and believes that Trump sincerely believes, if not in everything, then in much of what he says, and makes decisions based on his pretentious ideas about reality.
"And it seems that in the current White House there is a culture in which there are no brave fools to tell the boss that he is mistaken. To be honest, it's a somewhat frightening picture," adds Sergey Vakulenko.
At the same time, Trump himself, apparently, is closely following what is being said to him. At least publicly. Today, the owner of the White House reacted to the remark of the head of ExxonMobil, saying that he was inclined not to let the American oil giant into Venezuela, CNBC reports.