The Situation Room: The Fight between Moscow, Washington, and Caracas

The Situation Room: The Fight between Moscow, Washington, and Caracas

by | published May 6th, 2019

Welcome to this week’s Situation Room briefing, everyone, and I hope you all had a very nice weekend.

My weekend, as I intimated in Friday’s Oil & Energy Investor column, was a long one, in which I compared notes with contacts in the policy apparatus of Venezuela and Russia, and met with colleagues in the global energy community. So, I covered both geopolitics and energy over the last few days.

Here are two of my next steps this week following those discussions…

1. Venezuela’s Oil Stasis

This weekend didn’t hold all the conversations on my schedule. This week, I’ll be continuing discussions with my foreign colleagues on the status of Venezuelan oil assets as the crisis deepens.

While the attempted coup last Tuesday didn’t pan out as he expected, tensions between the official President Maduro and U.S.-approved interim president Juan Guaido remain high.

As far as oil is concerned, Venezuela’s output remains on a downturn, despite sitting atop the largest oil field in the world.

2. Moscow’s Oil Problems

Next, I am investigating claims that are also arising in my conference calls that Moscow has entered into a discount arrangement with Swiss commodity major Glencore to cover up Russian Ural Export Blend grade oil flow contamination.

According to the information, Glencore moved forward known defective crude to end users in Europe.

I have examined this topic in detail for my Energy Inner Circle readers in their weekly Dark Files mailing. You can read it right here.

Tensions in the South China Sea Are Not Helping U.S.-China Relations

In keeping with the rising geopolitical tensions, we certainly can’t forget China, which is in the process of becoming even angrier with American behavior in the South China Sea.

Over the weekend, two U.S. Navy destroyers angered Beijing by conducting a freedom-of-navigation operation in these disputed waters. To put it simply, the U.S. has challenged China’s claims to the region.

Beijing responded to this move with strong language: “The relevant moves by the U.S. warships have infringed on China’s sovereignty and undermined peace and security in relevant waters… China urges the United States to stop these provocative actions.”

This would be concerning on a normal basis, but with the recent renewed tariff threats from President Trump, any additional hostilities in the South China Sea will not be helping the situation one bit.

I’ve been watching this escalating situation for years, and I’ve compiled information on Chinese weapons and U.S. counter-weapons designed for this very problem right here.

Things could get even messier in the next few months.



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