Chapter 1: What is Trump threatening Exxon about?
Well, howdy there internet people, it's Belle again. So today we're going to talk about Trump threatening Exxon with a good time. Trump is apparently still pretty upset about how oil companies responded to his concepts of a plan for Venezuela. While on Air Force One, Trump said, quote, I'd probably be inclined to keep Exxon out. I didn't like their response. They're playing too cute.
Trump's going to exclude Exxon from Venezuela. Reminder, Exxon CEO Darren Wood made it pretty clear he didn't want the company getting wrapped up in the giant mess Trump created.
He said, quote, you can imagine to re-enter a third time would require some pretty significant changes from what we've historically seen here and what is currently the state.
Chapter 2: Why does Trump want to keep Exxon out of Venezuela?
He's saying a third time because they've already had assets taken twice down there. Before adding, quote,
If we look at the legal and commercial constructs, frameworks, in place today in Venezuela, today it's uninvestable. And so significant changes have to be made to those commercial frameworks, the legal system. There has to be durable investment protections. And there has to be a change to the hydrocarbon laws in the country. That's just the reality of the situation.
Despite Trump trying desperately to frame the Maduro snatch as some kind of major strategic win, nothing has fundamentally changed in the country's landscape. The whole military operation and all the risks it incurred didn't actually alter any oil production math because literally nothing structurally changed.
Trump, once again showing how oblivious he is to the actual concerns, said that previous problems in the country for U.S.
Chapter 3: What are the implications of Trump's statements on oil investments?
oil only existed, quote, because they didn't have Trump as a president. They had stupid people. Let's just take Trump at his word and that Trump, through sheer force of social media prowess, can keep everything at bay. Trump has three years max left in office, which means oil companies going down there to make the necessary investments will lose everything they invest, with zero chance of return.
They won't make their money back that quickly.
Chapter 4: How does Trump's misunderstanding affect the oil industry?
Trump's statements also demonstrate clearly that he doesn't plan on pushing for the structural changes necessary to make the country safe for investment. Trump, saying he's inclined to keep Exxon out of the game, is very much a don't throw me in the briar patch moment for the company.
Experts suggest that the oil industry would need to invest about $100 billion by around 2032 to get oil production up to what it was in the 90s. But it's also worth remembering that every barrel of oil that enters the market makes the other barrels less valuable.
Trump is asking oil companies to put out tens of billions in investment they won't get back to drop the value of the product they're already making.
Chapter 5: What are the potential consequences for Exxon and the oil market?
This all goes back to Trump's fundamental misunderstanding of the oil industry. When Trump was screaming to drill baby drill while U.S. wells were stopping production, everybody should have known he probably didn't really understand the industry. Anyway, it's just a thought. Y'all have a good day.