Holiday in Venezuela?
Compared to new investment in the Gulf State oil complex, Venezuela looks safe.
We just added ExxonMobil XNYS: XOM to the portfolio.
Artificial Intelligence can be useful to quickly explore an investment case through active search and reasoning. It is not foolproof, but it is helpful.
Of course, the quality of the answer depends on the sense of the question.
Is Exxon Mobil involved in Venezuelan crude? At what oil price would they participate?
Short answer: Exxon Mobil is not currently involved in Venezuelan crude and based on both public statements and the economics of Venezuela’s heavy‑oil sector, Exxon would likely only participate at sustained Brent prices in the high‑$70s to mid‑$80s plus credible legal guarantees.
Is Exxon Mobil involved in Venezuelan crude today?
No — Exxon is not operating in Venezuela.
Citations from your search results show:
Exxon’s CEO expressed skepticism about investing in Venezuela even after Maduro’s removal, prompting Trump to say he was “inclined to keep ExxonMobil out of Venezuela” .
Exxon has historically had a hostile relationship with Venezuela after Chávez expropriated its assets in 2007–2008. Exxon pursued arbitration and won multi‑billion‑dollar awards.
Chevron — not Exxon — is the only U.S. major with active waivers and operations in Venezuela.
Conclusion: Exxon is not returning under current conditions.
What oil price would Exxon require to participate?
Exxon’s threshold is higher than the breakeven price for Venezuelan heavy crude, because Exxon demands:
Rule‑of‑law certainty
Contract sanctity
Sanctions clarity
High returns vs global alternatives (Guyana, Permian, LNG, deepwater)
Estimated Exxon participation threshold:
➡️ Sustained Brent of ~$75–$90/bbl
AND
➡️ A stable, internationally recognized government with enforceable contracts.
This is consistent with:
The heavy‑oil full‑cycle economics you already mapped (new projects need $70–85 Brent).
Exxon’s own reluctance, as shown in the White House meeting where the CEO was skeptical about Venezuelan investment prospects .
Exxon’s global portfolio: they already have better barrels in Guyana, Permian, and LNG, so Venezuela must offer superior risk‑adjusted returns to compete.
Can you explain to me the geostrategic significance of Kharg Island?
Kharg Island is Iran’s single most strategically important energy asset: a tiny island that handles 80–94% of all Iranian crude exports, making it the economic “kill switch” of the Islamic Republic. Its location in the northern Persian Gulf—just outside the Strait of Hormuz chokepoint—means that any attack, seizure, or blockade of Kharg would instantly cripple Iran’s economy and send global oil markets into crisis.
Kharg Island is the heart of Iran’s oil export system
Multiple sources confirm that 80–94% of Iran’s crude exports move through Kharg Island’s terminals, pipelines, and storage farms.
France 24 calls it Iran’s “crown jewel” of oil infrastructure.
Yahoo News Australia reports it holds 94% of Iran’s crude for export, mostly bound for China.
Geographical notes that up to 90% of Iran’s oil has historically passed through Kharg.
Implication:
Destroying or capturing Kharg would collapse Iran’s export capacity almost overnight.
It is Iran’s main deep‑water loading terminal
Kharg is one of the few Iranian locations capable of:
Loading VLCCs (super‑tankers)
Storing millions of barrels
Handling 7 million barrels/day of loading capacity at peak design
This makes it the indispensable node for Iran’s long‑haul crude shipments.
Geography: close to Iran, but exposed
Kharg sits:
12–25 km off Iran’s coast
Northwest of the Strait of Hormuz
In shallow waters that are hard to defend against precision strikes
AS USA describes it as Iran’s “Achilles’ heel”—small, exposed, and catastrophically important.
Why this matters:
It is close enough for Iran to defend, but isolated enough that a determined adversary could target it without invading mainland Iran.
A prime military target in any U.S.–Iran or Israel–Iran conflict
Because Kharg is the single point of failure for Iran’s oil economy:
U.S. and Israeli planners have debated striking it.
U.S. officials have discussed seizing the island as a strategic lever.
But striking it risks:
A global oil shock
Escalation into a regional war
Long‑term environmental damage
This is why, despite its vulnerability, it has remained untouched even during intense conflict phases.
Global energy market implications
If Kharg were disabled:
Iran’s exports would fall by 80–90% immediately
China, India, and other buyers would lose supply
Brent could spike dramatically
Hormuz traffic disruptions would compound the shock
The Hill notes that Iran exports 80–90% of its oil via Kharg, making it central to global supply stability
Why Kharg matters more than the Strait of Hormuz
Hormuz is a chokepoint for global oil.
Kharg is a chokepoint for Iran’s oil.
If Hormuz closes:
Iran can still export a trickle via pipelines or smaller terminals.
If Kharg is hit:
Iran’s export economy collapses.
This asymmetry is why Kharg is considered the single most decisive pressure point on Iran’s economy.
Summary
Kharg Island is the most strategically important piece of energy infrastructure in the Middle East that has not been attacked in the current conflict. It is:
Iran’s primary oil export hub (80–94% of exports)
A deep‑water VLCC terminal
A small, exposed island that is militarily vulnerable
A single point of failure for Iran’s economy
A potential trigger for a global oil crisis if struck
Suppose Kharg Island was taken offline. What is your predicted oil price range on Brent and WTI?
If Kharg Island were taken offline, you’re essentially removing 80–94% of Iran’s crude export capacity in a single stroke. That’s the largest single‑point oil vulnerability in the world, and markets would react accordingly.
Immediate Market Reaction (first 24–72 hours)
This is the “shock premium” phase—markets price in worst‑case scenarios before fundamentals catch up.
Brent: +$12–$20/bbl jump
WTI: +$10–$16/bbl jump
If Brent were at $82 at the moment of the strike, you’d likely see it print $94–$102 within hours.
This is consistent with:
2019 Abqaiq attack (+$12 intraday)
2022 Russia invasion (+$15–$20 over several days)
Iran–Iraq War tanker attacks (persistent $10–$15 premia)
Kharg is more important to Iran than Abqaiq is to Saudi Arabia, because it is a single point of failure.
Conclusion
US oil majors, like ExxonMobil look good in this wartime period.
I do not think that the market has fully priced the supply risk before us.
Donald Trump ordered a U.S. military invasion of Venezuela on January 3, 2026, under the codename Operation Absolute Resolve.
This provided effective control of Venezuelan Oil Reserves, which are the largest in the world, although they are expensive-to-produce heavy crude.
Taking control of those oil reserves before attacking Iran makes strategic sense.
For now, any move on Kharg Island has been downplayed. It is certainly valuable if the facility is left un-bombed and intact should a US-friendly regime in Iran arise.
I am not sure how friendly Iranians, at large, will be to the USA and Israel following the attack on oil facilities in Tehran that left that city shrouded in toxic smoke.
However, Kharg Island is the lever President Donald J. Trump has on China.
The lever on ExxonMobil to invest in Venezuela is the oil price.
We expect the new price to be $80 to $90 USD per barrel.
In the latest China five-year plan, they resolved to build significant Coal-to-Liquids refining capacity, far inland, in Xinjiang. This is a technology that was used in WWII when German access to Middle Eastern oil was cut off. It is also the technology of choice in South Africa to produce diesel from coal.
Sasol still runs the largest coal-to-liquids liquefaction (CTL) plant st Secunda.
The Chinese have been working, in collaboration with Sasol, since at least 2006.
There is a lot of talk about nuclear weapons, but I think it is about oil.
The USA and Israel killed the Supreme Leader who had a fatwa against acquiring nuclear weapons. I think the new regime will go ahead and build them.
Oddly enough, that would likely bring a Mexican Standoff and some semblance of peace, in much the same way that Kim Jong Il and the DPRK are off the radar.
I do not advocate for that.
I am simply an analyst.
The real question of importance is what happens to Kharg Island.
Note that the background issues point to the importance of this book.
Folks who did not grow up in the 1970s may be a bit shocked by all this. However, the operating principle is much older than that. It is Machiavelli, pure and simple.
Once you have assimilated this Zeitgeist, investment strategy becomes easier.
When Great Games are being played, the players must be careful not to put too many playing pieces into the light. They must also be careful about public opinion.
The United Nations may well be emasculated, but there are limits to how hard Iran, the USA, and Israel can push this war. They may miscalculate.
Public anger is the peacemaker of our time.
If this war is pushed too hard and too far it will be pitchfork time.
I make no judgement on this ill-conceived war other than this:
It is better to be a seller of safely sourced crude oil than a buyer.
It will be tricky to navigate these markets, especially for those nations that are net energy or fuel importers. Australia imports 90% of liquid fuels.
This is why we added Woodside Energy XASX: WDS and ExxonMobil XNYS: XOM to our model portfolios last week before the big Monday crude oil price spike.
The price reaction in markets has been modest.
I would still be buying those stocks now.