Continental Resources Chairman Harold Hamm discusses US interest in Venezuela’s vast oil reserves and more on ‘Kudlow’.
At first glance it seems like a contradiction – and the left is quick to call it a moral failure.
America is swimming in oil, but is still president Donald Trump has taken steps to bring Venezuelan crude oil to US refineries. If the United States is energy independent, they ask, why would it buy oil from Venezuela at all? After years of sanctions and pressure on Caracas, isn’t this hypocrisy?
The answer is no. It’s strategy. And it starts with a basic fact that too many commentators ignore: America has a lot of oil — just not always the right kind.
The shale revolution, powered by fracking, has undergone a transformation American energy production. It flooded world markets with light, sweet crude and made the United States the world’s largest oil producer. This achievement strengthened national security and broke the hold of the old OPEC cartel.
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A pump jack stands near an oil spill at a Petroleos de Venezuela SA (PDVSA) plant in the Orinoco belt of El Tigre, Venezuela. (Bloomberg/Getty Images/Getty Images)
But fracking also changed the mix of oil America produces.
Much of the U.S. refining system — especially along the Gulf Coast — was built decades ago to process heavy, sour crude oil. These refineries invested billions in specialized equipment such as cokers, hydrocrackers and desulfurization units designed to efficiently convert thick, high-sulfur oil into gasoline and diesel.
When these refineries cannot obtain enough heavy crude oil, they operate below optimal efficiency. Yields are declining. Costs are rising. Fuel supplies are becoming more vulnerable. And when hurricanes, power outages or global disruptions strike, that vulnerability quickly manifests itself at the pump.
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That’s where Venezuelan oil comes into play.
Export-Import Bank of US President and Chairman John Jovanovic discusses on ‘The Claman Countdown’ what role the bank can play in Venezuela and the oil industry.
Venezuela produces some of the heaviest crude oil in the world – exactly the type that many refineries on the US Gulf Coast are designed for. Route this barrels to US ports This allows these refineries to operate closer to design capacity. The result is simple: more petrol, more diesel, lower prices and a more stable fuel supply.
That is the energy economy. The strategic payoff in The American Hemisphere is just as important.
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For years, China has been a major Venezuelan buyer, using opaque transportation arrangements and debt to keep Caracas in dependence while expanding Beijing’s influence across Latin America. When Venezuelan barrels flow to American refineries instead of Chinese ones, Beijing loses that influence.
As for Russia, Moscow thrives on sanctions avoidance, proxy relationships and instability at America’s borders. A Venezuelan oil trade anchored in transparent US-linked markets sharply limits Russia’s ability to use Venezuela as a geopolitical pressure point in the Western Hemisphere.
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The shale revolution, powered by fracking, has transformed American energy production. It flooded world markets with light, sweet crude and made the United States the world’s largest oil producer. This achievement strengthened national security and broke the hold of the old OPEC cartel.
Then there is Cuba – the most overlooked but most consistent link. This communist island prison is an active platform for intelligence gathering, political interference and regional subversion. Cuba exports security services, entrenches itself in allied regimes across Latin America and serves as a conduit for Russian and Chinese influence. Subsidized Venezuelan oil has been the lifeline that has kept that system alive.
Ending that subsidy weakens a communist outpost that exports repression and instability to the entire region. And instability has consequences. Failed states and hostile actors create migratory pressures that eventually reach the U.S. southern border. This pressure does not arise in a vacuum; they are the result of poor energy and security policies in our own hemisphere.
President Trump understands what his critics never understood: foreign policy that stabilizes fuel prices, strengthens American industry and weakens America’s adversaries is not hypocrisy.
It is smart strategy.
