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Posted March 18, 2022

Sean Ring

By Sean Ring

Guess Who Really Owns Venezuelan Oil…

  • Without Russia’s 245,000 barrels per day, the US needs oil from somewhere else.
  • Instead of releasing its stranglehold on the US oil industry, Biden turned to Maduro.
  • The embattled Venezuelan president can’t do much.  But the new owners can.

Happy Friday!

Whether you’ve got a Guinness-induced hangover or not, I’m glad you made it.

By 5 pm today, you’ll be clamoring for your well-deserved adult beverage.

But before that, grab your coffee and a seat.

Boy, have I got a tale to tell you!

It has loads of links because, to me at least, this is a story so gob-smackingly, eye-rollingly, jaw-droppingly stupid that I can scarcely believe it myself.

I once wrote that the US continues to shoot itself in the foot with sanctions.

I now think America has shot so many holes in its foot that it’s become a one-legged man in an ass-kicking contest.

Let’s get into it…

US Sanctions on the Maduro Regime

Though I’ve traveled most of the world, I never made it to South America.

I’ve never really been interested, to be honest.

But that doesn’t mean it’s not a critically important geopolitical region.

Venezuela, though, interests me because it’s a classic demonstration of what socialism in practice does to resource-rich countries.

Put plainly, socialism destroys those countries.

Hugo Chavez, and less famously, Nicolas Maduro, have assumed (taken) the Venezuelan presidency.

Maduro, a former bus driver, has ruled since 2013.

He’s been accused of various crimes against humanity.

On March 26, 2020, the U.S. Department of Justice indicted Maduro on drug trafficking and narco-terrorism charges, while the Department of State offered a $15 million reward for information that helps "bring him to justice.”

I can only imagine what Philosopher/Truck Driver John Ring would do to The Swamp if he but had a taste of power!

Of course, some Venezuelans have fought back against this.

And you get no prizes to think the See Eye Aye’s filthy paws were on it, as well.

(Ever notice the same people who declare any election a foreign leader who’s not a Washington pawn wins must be rigged, are the same people who are convinced Joke Biden got 80,000,000 votes fair and square?)

To be fair, most of the Western Hemisphere doesn’t recognize the Maduro presidency this time around, convinced he won a sham election.

From the Congressional Research Service:

In January 2019, the United States recognized Juan Guaidó, president of the democratically elected, opposition-led National Assembly, as interim president. 

The Trump Administration then imposed sanctions on Venezuela’s state oil company (Petróleos de Venezuela, S.A., or PdVSA), central bank, and government to pressure Maduro to leave power.

As of January 22, 2021, the Treasury Department had imposed sanctions on roughly 166 Venezuelan or Venezuelan-connected individuals, and the State Department had revoked the visas of more than 1,000 individuals and their families.

Despite these and other measures, Maduro remains firmly in power, and his party now controls a de facto National Assembly seated on January 5, 2021.

So the USG imposed sanctions.  And once again, these sanctions, which went around, have come around again.

US Oil Needs

For context, on average, the US consumes 19.78 million barrels of oil per day.

So when Joe Biden agrees to release 30 million oil barrels from the Strategic Petroleum Reserve, it buys the US 1.5 days of oil consumption.

That’s it.

You may raise a Dr. Evil pinkie to your lip in solidarity!

Of course, Biden needs to open up the Keystone XL pipeline.

The pipeline would have shipped 830,000 barrels per day, easily enough to cover the Russian shortfall.

The US had been importing 245,000 barrels of crude per day from the Russians.

Would that have alleviated prices at the pump?

Probably not, as inflation and supply chain issues were plentiful for the past two years.

Senator Marco Rubio tweeted:

I believe the senator is correct.

The US Goes Back to Venezuela, Cap in Hand

After vilifying Venezuela for over a decade and a half and not giving oil companies the assurances they needed, the US went to the Maduro regime to ask if they’d sell their oil to the US.

From Forbes:

Caracas used the talks to press for relief from the increasingly stiff U.S. sanctions that have been imposed for more than 15 years, access to the $1.95 billion of gold held in the Bank of England, and the removal of the $15 million reward for information on Maduro’s alleged involvement with drug trafficking.

I believe the US response was along the lines of:

Oh, I’m just kidding.

In return, the US asked for

    • free, democratic elections for Venezuela’s presidency;
    • the release of American citizens held there, including six Citgo executives;
    • a guarantee that Venezuela, which nationalized its oil industry in 1976, won’t interfere with private European and American companies operating in the oil sector.

Again, Marco Rubio stepped up to the plate with this tweet:

Rubio is wrong on almost everything else, but I wanted to give him his due on this.

Broken clock and all…

But the pièce de résistance is this next bit.

Who Really Owns Venezuelan Oil

Again, just to prepare you, this next bit is almost too unreal to believe.

And it just goes to show you the Swamp People are utterly incompetent.

Anyway, I had been listening to a video interview with Dmitry Orlov, the Russian essayist I mentioned in a previous Rude.

He said something that pricked up my ears.

“Venezuelan oil is a Russia sovereign interest.”

(This link will take you to the portion of the video when he mentions this.)

I had no idea what he was talking about.

Then I did some searching.

He’s right.  And it’s as plain as the nose on your face.

​​From Forbes, again:

Venezuela has been selling its crude oil globally through Russia’s Rosneft, relying on the company for financing for PDVSA (Petróleos de Venezuela, S.A., the state-owned oil and natural gas company).

But according to the Journal of Petroleum Technology, “Rosneft, Russia’s leading oil producer, said it has transferred all its holdings in Venezuela to entities controlled by the Russian state.”

This was done by creating a new company, “Roszarubezhneft,” owned by the Russian government, to takeover Rosneft’s assets.

You may think, “Well, that’s just one company.”

Except there’s only one petroleum company in Venezuela.

And Russia owns 40% of five joint ventures with it.

Conclusion: the Russian government is directly financing Venezuela’s oil industry.

So, if you want Venezuelan oil, you’ve got to ask one person: Vladimir Putin.

“Pretty please… with sugar on top?”

Wrap Up

I’m going to wrap this up in bullet points, just to make sure we’ve got it:

    • The sanction-happy USG sanctions Venezuela over its dubious elections.
    • Russian oil company Rosneft comes to PDVSA’s rescue.
    • To avoid further sanctions, Rosneft transfers ownership of PDVSA joint ventures to the Russian government.
    • The USG embarrasses itself by going cap in hand to a dictator they’ve vilified.
    • And the US negotiations team forgot about the Russian ownership of those wells, to boot.

Yes, your leaders are moronic to the point of madness.

Sooner or later, the US will have to withdraw this stupid strategy, as it’s a losing one.

But it may already be too late.

According to Pepe Escobar via Zero Hedge, Russian Foreign Minister Sergei Lavrov last Thursday said the following:

We will solve the problem – and the solution will be to no longer depend on our western partners, be it governments or companies that are acting as tools of western political aggression against Russia instead of pursuing the interests of their businesses.

We will make sure that we never again find ourselves in a similar situation and that neither some Uncle Sam nor anybody else can make decisions aimed at destroying our economy.

We will find a way to eliminate this dependence.

We should have done it long ago.

Indeed.

After you’re done shaking your head at the sheer stupidity of it all, forget about it and have a wonderful weekend!

You deserve it.

All the best,

Sean

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