El Presidente crowed on Friday about his oil deal with Venezuela. He claims to have obtained rights to 65 billion barrels of crude oil still in the ground.
The Pentagon (!) will become a partner in this deal on behalf of the government.
Sounds a lot like Trump needed to announce something he could spin as positive given how deep in the dung his policies have buried him.
You can barely see the top of his wig.
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The Wall Street Journal compares the shakedown to a visit to Cuban Dictator Fulgencio Batista by American gangsters during the 1950s as depicted in “Godfather II.” Their editorial board is highly critical.
His deal sounds like so much BS for these reasons.
Trump bragged that he would use the oil to refill the nation’s strategic petroleum reserve, which his administration has drawn down to the lowest level since the 1980s. But it’s no good for that.
The crude is highly sulfuric. Its expensive to remove it from the ground because it activly corrodes equipment which is costly to replace. Expensive to refine, also, for this reason.
And, the equipment that now exists is dilapidated and needs to be replaced, at a cost running into the hundreds of millions of dollars.
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The deal solves no quick problems because even if it is removed from the ground, it needs refinement. That will not happen soon and there will be no rapid effect on pump prices for likely years, according to industry experts.
There’s a lag time between delivery of crude and refinement. Due to the nature of this crude, it will sell for more at the pumps because it will cost more to refine.
But the announcement sounds good.
Whether the Pentagon has the legal authority to become a partner in a business deal is questionable.
Whether there is anyone in the Pentagon who is capable of structuring and administering such a deal is not questionable. The Pentagon cannot even competently engage in its primary purpose.
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I had to chuckle when I read that Secretary of Defense Pete Hegseth was one of the US negotiators. There’s a business brain for you.
And speaking of its primary purpose, the Pentagon has expended almost all of its critical anti-missile defense munitions in the Iranian war.
It’s focus now needs to be not on Venezuela oil but on replenishing anti-missile munitions that have left the United States and European allies, naked to Russian or Chinese interventions.
So far it cannot do that.
And whose money is the Pentagon going to contribute to this venture? The president has already said it will not involve taxpayer funds, but he’s not a reliable source on anything.
What Trump has done is reckless. Hell, he snatched the president of the country, and put a gun to the head of the new president who has put her favorite person into this deal on behalf of her country.
The oil companies he wants to heavily invest to remove this oil have to answer to their shareholders, even if Trump does not answer to voters.
Its going to cost a fortune to recover this oil and no American company will invest with the possibility it can be shut out of Venezuela again.
And, not all Venezuelans are pleased that their leader is doing this deal with Trump and her cohort, nor are the Dems who may take control of Congress in a few months.
What will come out of this? Likely not a hell of a lot. But for the base, it sounds good.
Jim Astrachan is lawyer who represents clients in intellectual property law and litigation, mediation, and business, regulatory, and transactional matters. He’s a Life Fellow of the Baltimore City Bar Foundation, the Maryland Bar Foundation, and the American Bar Foundation.