Ve Venezuelan crude oil Loading... : Investor Sentiment and Bull/Bear Views

The U.S. brokered a deal with Venezuela's interim authorities to release 30-50 million barrels of sanctioned crude, is marketing Venezuelan crude in global markets with U.S.-controlled proceeds, is selectively rolling back sanctions, and is coordinating with private oil companies and banks; oil executives are described as eager to invest, creating a positive opportunity for Venezuelan oil exposure and oil companies.

Julian Lee is skeptical that Venezuela's oil can be a major upside driver: although Venezuela claims the world's largest reserves, 86% are Orinoco tar sands that few refineries can process and that are difficult and expensive to extract; future oil demand growth is expected to be driven by petrochemical feedstocks and plastics, for which Venezuelan crude is poorly suited. He also notes that Western regime-change precedents in Libya and Iraq show oil industry recoveries are slow and uncertain, and that attractive terms for U.S. companies are not guaranteed, so prospects for Venezuela's oil industry are not great.