U.S. – VENEZUELA: FROM OIL TO GLOBAL GEOPOLITICS, MARKET SITUATION

The US – Venezuela story is going far beyond a single oil issue and expanding into a global geopolitical picture, impacting energy, defense, US–China relations, Taiwan, and even Greenland.

Today, there is information indicating that Michael Burry, the famous investor from The Big Short, shared that he has held Valero Energy since 2020 and is increasingly confident in this investment as the US shows prospects of deeper involvement in restoring Venezuela’s oil industry. Many refineries in the Gulf of Mexico are designed specifically to process Venezuelan heavy oil, but for many years, they have had to use suboptimal crude sources, limiting profit margins. If Venezuelan oil returns to the market, margins for products like diesel, jet fuel, and asphalt could significantly improve. Therefore, Burry stated he will continue to hold Valero long-term, and the positive market reaction as the stock surged also partly reflects that view.

Not only refineries, but US oilfield service companies are also considered advantaged, as Venezuela’s oil infrastructure has severely deteriorated after decades of underinvestment. Companies like Halliburton, Schlumberger, and Baker Hughes can participate in repairing pipelines, refineries, and the entire energy infrastructure chain, thus benefiting long-term from investment and reconstruction.

Alongside energy, US defense and infrastructure companies could also benefit as geopolitical tensions increase. Defense spending often rises during unstable periods, driving demand for weapons, technology, construction, and logistics, creating a structural cash flow in the medium term.

Conversely, China is experiencing more pronounced negative impacts. During today’s trading session, many major Chinese oil stocks on the Hong Kong exchange fell sharply as markets feared Beijing might face restrictions in accessing Venezuelan oil after the US removed President Nicolás Maduro. Specifically, CNOOC dropped about 3%, and PetroChina fell around 5%, reflecting concerns over heavy crude supply, which accounts for about 5–8% of China’s total oil imports. This type of crude is particularly suitable for the refineries that China has heavily invested in over the years. If this supply chain is disrupted, Chinese oil companies could face difficulties maintaining production and profits.

Geopolitically, the event in Venezuela has sparked many debates around precedents in international relations and the concept of spheres of influence, with links to hotspots like Taiwan and Greenland. Some worry that if the US acts strongly in its “backyard,” other great powers might cite this in different contexts, such as China–Taiwan issues.

Along the same vein, Greenland has been taken more seriously after the Venezuela event. Although most experts believe the US is unlikely to act similarly, strong reactions from Europe show that US allies are concerned about the concept of influence zones and geopolitical precedents. Things once considered “unthinkable” are now being discussed more frequently, though mostly still at the level of speculation.

It is important to emphasize that there are always voices both supporting and opposing what happened over the weekend. Each side has its own reasons for their actions, and the true motives are often not fully reflected in the media. Financial markets do not judge right or wrong but reflect economic consequences, cash flows, and future expectations.

Currently, market reactions are quite positive. Today, stocks, crypto, oil, gold, and silver all rose simultaneously, a rare occurrence of multiple asset classes moving upward together. This indicates that the market is not rushing to price in negative scenarios, especially for oil prices, and is still waiting to see how events unfold next.

In summary, from just one event in Venezuela, the market has reflected multiple layers of impact: US and energy, defense, and infrastructure companies could benefit in the medium term; China is under pressure regarding supply and strategic position; and the global market is cautiously reassessing geopolitical risks, influence zones, and the balance of power moving forward.