The White House sponsored a coup in Venezuela, with some loss of life. They captured President Maduro, leaving Vice President Delcy Rodriguez as the interim leader.
I have zero expertise in Venezuelan politics, but that might put me in the same boat as the brain trust in the White House that engineered the coup. I just want to comment on why it is unlikely to matter much for the oil market.
Although there is not a lot information, claims from the White House that they are running Venezuela are farcical — the regime there is in place, just missing one person. Initial reports suggest that Rodriguez might be more cooperative with the Americans, but that is not saying a whole lot. If the the Americans want to dump capital in improving their oil infrastructure, I doubt that there would be many complaints.
The problem is that Venezuela has run-down infrastructure to produce heavy crude — which the world is currently flooded with — just ask the Albertans. (Albertan crude replaced Venezuelan crude in American refineries, which are configured to use the heavy crude.) Although people online like quoting the size of Venezuelan reserves, those reserves are not going to be economically useful for some time. The value of the flow out of the reserves is not that significant in the global market, and that flow will not increase quickly without massive investment. Oil infrastructure is easily damaged by insurgents with cheap drones, so it is not as if it will be a good place for American firms to invest unless the Venezuelan regime wants to cooperate (admittedly possible).
The operation was easy because it the American special forces were just acting as muscle for domestic coup plotters. Such cooperation would not be there if a full regime change were attempted. Outside of the effect on Venezuela (which I have no way of judging), the significance of this operation is that its ease will whet the appetite of the White House for using force elsewhere.
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(c) Brian Romanchuk 2024
