Donald Trump wants you to know that there is one leading reason why he is bearing down militarily on Venezuela: drugs.
It is, he has said repeatedly, that country’s part in the production and smuggling of illegal narcotics into America that lies behind the ratcheting up of forces in the Caribbean in recent weeks. But what if there’s something else going on here too? What if this is really all about oil?
In one respect this is clearly preposterous. After all, the United States is, by a country mile, the world’s biggest oil producer. Venezuela is a comparative minnow these days, the 21st biggest producer in the world, its output having been depressed under the Chavez and then Maduro regimes. Why should America care about Venezuelan oil?
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For the answer, one needs to spend a moment – strange as this will sound – contemplating the chemistry of oil. Crude oil is, as the name suggests, quite crude. It’s an organic compound, the product of ancient organisms that have been compressed and heated up under the earth’s surface for hundreds of millions of years. And as such, crude oil is subtly different depending on the conditions under which those organisms were compressed.
In some parts of the world, crude oil comes out of the ground as clear, flowing liquid. Sometimes it is green. Sometimes it is heavy, thick gloopy stuff. Oil producers have a word for these differing varieties: light, medium and heavy.
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And here’s the first thing you need to know. Most of America’s refineries are set up to process the heavy stuff. In other words, if America is going to keep its cars fed with gasoline, it needs heavy, gloopy crude. And since it costs many, many billions of dollars to overhaul refineries, no-one particularly wants to do that anytime soon.
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But the second thing you need to know is the vast majority of that oil produced in America, thanks to the shale revolution, is light crude. In other words, America’s refineries are not compatible with most of the oil America produces.
The upshot is that for all that America theoretically pumps more crude oil than it would ever need out of its own territories, it is still totally dependent on trade to meet its demands for heavy oil. Most American crude is exported overseas. And America imports well over 6,000 barrels of oil a day to feed its refineries in Texas and Louisiana with the heavy stuff they can digest.
All of which brings us to Venezuela, because it is, alongside Canada and Russia, sitting on the world’s biggest reserves of heavy oil. Right now, most American oil comes from Canada but were Donald Trump keen to wean himself off Canadian crude, he is well aware there is a vast resource of it sitting on the other side of the Caribbean for all those Texas and Louisiana refineries.
