By Matt Underwood So, the situation appears to be that Trump is saying he’s going to keep Exxon out of Venezuela’s oil industry. But, and this is a pretty big “but,” Exxon seems to be the one who doesn’t *want* in. It’s almost like a child throwing a tantrum, declaring they’re not inviting someone to a party the person wasn’t even planning on attending.
The crux of the matter seems to be Exxon’s assessment that the whole Venezuelan oil situation isn’t a good investment. They’ve essentially said, “It’s uninvestable,” which, coming from a major oil company, is pretty telling. It looks like they’re seeing a bunch of red flags: the low quality of the oil, the logistical nightmares of getting it out, and the sheer cost of modernizing the infrastructure. Then there is the country’s corrupt and unstable government to contend with.
It’s also pretty clear that the oil industry knows Trump’s days are potentially numbered, so they’re probably not keen on making huge long-term investments in a volatile political climate. They know that he’ll likely turn on them the moment it benefits him and his interests. Plus, there is an overabundance of oil on the market right now. Exxon isn’t stupid.
The details further complicate things. We’re talking about billions to modernize infrastructure, and Trump’s plan might involve taxpayer money for the project. This would require approval from Congress, which could prove problematic. With the Republicans having already voted with the Democrats to block Trump’s emergency war powers, this might not happen at all. And then there’s the fact that even if the deal went through, any stability he promises could be up for grabs after the next election.
So, Trump’s response – “I’d probably be inclined to keep Exxon out” – seems to be an attempt to spin a situation where he’s being rejected. He is trying to create the illusion of control when, in reality, Exxon is making a smart, financial decision based on the current market conditions and the risks involved. It seems he can’t even get the oil companies to go along with his plans.
It’s also worth noting the oil itself is of a lower grade, which means more expensive refining. It is located in a logistical hellhole with many armed factions and an unstable corrupt government, further upping the cost. Exxon is already owed billions after Chavez’s nationalization, and so they have a lot to lose from going into Venezuela.
And here we are at what feels like a classic case of Trump’s style – a reaction driven by hurt feelings and a misunderstanding of market forces. It’s like he’s saying, “You can’t have any pizza!” when the person in question already said they don’t *want* pizza. The whole thing points to a fundamental lack of understanding of the situation and the basic economics at play. It appears that instead of considering a reasoned response, Trump is responding in an emotional, almost childish, manner.
It’s a bizarre situation. It does feel like a toddler in chief trying to punish someone for not wanting to play along. But it’s also a demonstration of his administration’s disregard for long-term planning and financial practicality. It does feel like we’re watching a reality show where the star is making things up as he goes along, with potentially disastrous consequences.