Michael Burry says the U.S. attack on Venezuela weakens Russia
Michael Burry says the U.S. attack on Venezuela weakens Russia
Michael Burry attends the "The Big Short" New York premiere at Ziegfeld Theater on November 23, 2015 in New York City. (Jim Spellman/WireImage)
Prominent investor Michael Burry says Russia may be the first U.S. adversary to feel the sting of the U.S. intervention of Venezuela.
“Russia oil just became less important in the intermediate and long-term,” Burry wrote in a Substack post. Still, he believes it will take up to seven years for the U.S. to revitalize the Venezuelan oil industry, as President Donald Trump strongly desires.
The investor of Big Short fame — who predicted the 2008 financial crisis — said that the "game had changed," despite the tranquil reaction from financial markets. The U.S., Burry said, could harness Venezuelan oil in a way that shrinks Russian influence.
"This is a paradigm shift despite the markets yawning," Burry later wrote on X.
Trump has maintained his belief that U.S. oil companies will be eager to re-establish their foothold in Venezuela following the deadly U.S. military raid that toppled Venezuelan leader Nicolás Maduro. But most of the authoritarian regime has been left intact, and the Trump administration has demonstrated a willingness to work with Venezuela's acting president Delcy Rodríguez, formerly an oil minister in the country's state-owned oil company.
The shuffling has done little to calm nerves among oil giants about re-starting operations in a country where they faced a wave of nationalization under Maduro's predecessor Hugo Chavez two decades ago. Spokespeople for Chevron and ConocoPhillips told Quartz on Monday that they're monitoring developments and holding off on making new commitments.
Venezuela's daily oil output hovers at around 900,000 barrels per day, under half of its pre-Maduro highs when it reached 2 million barrels per day. Venezuelan oil makes up about 1% of global oil output. Analysts believe it could take upward of $100 billion over a decade to upgrade aging oil installations plagued by equipment failures, theft, and government mismanagement.
Trump told NBC News on Monday that he believed it could take only 18 months to rebuild Venezuela's shattered oil sector. Most experts believe it will take much longer than that.
The Trump administration has maintained the legality of its raid in Venezuela, while the UN Human Rights Office said Tuesday that the U.S. "undermined a fundamental principle of international law."