If only Dick Cheney was alive to see this… 

So crude is popping bottles this week, which if you really look at it… is objectively funny considering a whole lot more oil is about to come out of the ground. But as we all know by now, the markets don’t run on logic. They run on Dick Cheney sized greed, positioning, and guys name Mike posting Substack essays in the wee hours of the night between George Lopez reruns. 

(Source: Reddit) 

For context, Venezuela has the largest proven oil reserves on Earth… and somehow only produces ~1% of global supply. Well, buckle up f*ckleheads because now that US Special Forces gave Venezuelan leader Nicolás Maduro and his wife the Jet2 holiday treatment… those numbers are about to change. And energy stocks didn’t wait around to ask questions. Chevron ripped. Exxon moved. Valero absolutely sent it. Even the oilfield services names like the true “foreign intervention ETF” caught a bid. And then, right on cue… Michael Burry cleared his throat. 

(Source: CNBC) 

The man who hasn’t been wrong, just early and deeply unpleasant about it reminded everyone that Valero can actually process Venezuelan heavy crude, which is the gross, sulfur-laden sludge most refineries can’t handle without crying. Gulf Coast refineries were literally built for this stuff… and have been running suboptimal feedstock for years like a Ferrari on lawnmower gas.Translation: better margins, better yields, better everything… eventually.

Which is why it’s no surprise that the Cassandra Unchained avatar has been holding Valero since 2020. And now, more than ever he’s leaning into it harder, because this is the exact kind of slow, ugly, geopolitically awkward trade that prints while everyone else argues about AI. But refining is only half the story. For instance, Venezuela’s oil infrastructure is wrecked. Pipelines are rotting, refineries are outdated, and equipment is being held together with sanctions and a prayer. Meaning, if the U.S. actually follows through on rebuilding production, that work isn’t going to local contractors. It’s going to your homeboys named Haliburton, Schlumberger, and Baker Hughes. Spoiler: Only real ones remember how well foreign intervention treats oilfield services stocks. This is the part where Halliburton doesn’t need oil prices to moon… it just needs governments to panic and sign checks.

(Source: Giphy) 

Now does more supply eventually pressure oil prices? Probably. Does that matter in the short-to-medium term? Not really. This trade is less about scarcity and more about getting a spread eagle of access. Which means Venezuela going from “pariah state” to “strategic asset” flips a lot of switches very fast. And markets love nothing more than a formerly untouchable asset suddenly becoming investable again. Burry sees it. Big Oil sees it. And services names see it. All while everyone else is having pissing matches about whether oil is dead or not. It isn’t. It’s just changing ownership in the biggest shakeup since Tom Wambsgan became the CEO of Waystar Royco. Until next time, friends… 

At the time of publishing, Stocks.News holds positions in Exxon Mobil as mentioned in the article.