Trump’s oil policy could 'decimate' a 'key backer of the president'

During a two-hour interview with the New York Times, U.S. President Donald Trump was asked how long he expected the United States to be in Venezuela following the capture of leftist President Nicolás Maduro — who is being held in a federal detention center in New York City while facing drug charges. The Times reporters asked: Six months, a year, or longer? And Trump responded, "I would say much longer."

Trump isn't shy about his desire for U.S. access to Venezuelan oil, saying, "We're going to be using oil, and we're going to be taking oil." And according to reporting from the Wall Street Journal, Trump and his allies "are planning a sweeping initiative to dominate the Venezuelan oil industry for years to come."

But Trump's aims for oil prices, WSJ reports, could put him at odds with the shale industry — which has been a "key backer of the president."

In an article published late Wednesday night, January 7, WSJ reporters Brian Schwartz Benoît Morenne and Josh Dawsey explain, "A plan under consideration envisions the U.S. exerting some control over Venezuela's state-run oil company Petróleos de Venezuela SA, or PdVSA, including acquiring and marketing the bulk of the company's oil production, people familiar with the matter said. If successful, the plan could effectively give the U.S. stewardship of most of the oil reserves in the Western Hemisphere, when factoring in deposits in the U.S. and other countries where U.S. companies control production."

This plan, the reporters add, "could also fulfill two of the (Trump) Administration's primary goals: to box Russia and China out of Venezuela and to push energy prices lower for U.S. consumers."

Trump, according to Schwartz, Morenne and Dawsey, "has repeatedly raised the prospect of lowering oil prices to $50 a barrel — his preferred level, two senior administration officials said."

"But oil prices are already low, with the U.S. benchmark hovering around $56 a barrel Wednesday, and Trump has struggled to persuade U.S. oil-and-gas producers to crank out more crude and help him accomplish his political goals," the WSJ reporters add. "Many companies see $50 a barrel as a threshold, below which it becomes unprofitable to drill, and a sustained period of low oil prices could decimate the U.S. shale industry, which has been a key backer of the president… The administration's actions amount to an expansion of its 'drill, baby, drill' mantra well beyond U.S. borders."

At a Goldman Sachs investor conference in Miami, Chris Wright — energy secretary for the Trump Administration — told attendees, "We're going to market the crude coming out of Venezuela — first this backed up, stored oil, and then indefinitely, going forward, we will sell the production that comes out of Venezuela into the marketplace."

Read the full Wall Street Journal article at this link (subscription required).