The Tale of Venezuela ends with a potential deal with the United States of America. Donald Trump grabbed a historical pull for the USA, getting access to Venezuela’s 303 billion barrels of oil reserves. This is the biggest oil deal in world history, worth 100 billion USD. Many reports suggest this deal as a 100-year-long development project.
This is the groundbreaking result of Venezuelan President Nicolas Maduro’s abduction. Now, the outcomes are showcasing that the abduction worked for the USA. But this raised a few concerns over:
How will the oil war ignite economically in front of each other?
How will this deal hurt China?
And will the USA be the new oil-controlling authority?
How will the oil war ignite economically in front of each other?
This deal is a direct sign of global oil control for the United States. The biggest oil reserve on the globe is now on the USA side. Before that, they already had Saudi Arabia, Canada, Iraq, UAE, Kuwait, and the States itself. The States had direct or indirect control over seven countries out of the top ten oil reserves. Venezuela was part of the China and Russian alliance, but with the fall of Nicolas, the dynamics of the oil industry changed.
Earlier, many reports suggested there would be a face-off between the USA and China over Venezuela. But things never happened between them. The States went to Iran with similar thoughts, while this time the consequences were not the same. And with this deal, a new war of alliances ignited between economic powers like the USA, China, and Russia. While the USA already eyed Nigeria for its oil reserves, Iran’s importance for China and Russia also raised.
How will this deal hurt China?
This deal had a direct impact on China. Previously, China was the biggest oil buyer of Venezuelan crude oil, purchasing over half of the total oil exports. With the exile of Nicolas and the US deal, the setback for China will be massive and long-lasting. With the downfall of Nicolas, a heavy amount of 389,000 to 470,000 barrels per day of heavy crude oil was discounted.
At the exile, they switched to Russia and Iran for replacement. Somehow, it solidified the fact that China relies on these two more often than before. Where the closure of the Strait of Hormuz and tensions in the Middle East are weakening China. The shortfall is roughly over 4 to 5 billion bpd of Gulf-origin crude oil. Right now, China holds a nominal buffer of up to 120 days, while working at peak refinery runs for 60 to 90 days before a cut was necessary.
Is the USA the new oil-controlling authority?
Somehow, the States regained control over global affairs. The USA is, for the time being, the oil-controlling authority, where the closure of the Strait of Hormuz and control over the biggest oil reserve made the situation clear. The US holds influence over seven out of ten top oil producers, which restricts any other economic power from coming anywhere near.
If the States gain control over the Strait of Hormuz, it will be the raising point of a new oil war. This will cause a direct clash between China and the USA, as, for now, most of the oil they are getting is from Iran. And with the fall of it, the Middle Eastern oil export control also went to the USA.
But for the time being, these are just speculations before things settle down. The USA also struck an Iranian island after one month. Somehow, it all just seems like missing pieces of a puzzle pointing toward a direct war with China.
