Trump announced the United States cut a deal with Venezuela for majority control of more than 65 billion barrels of oil reserves. Posted it on social media. Didn't run it through the State Department. Didn't brief Congress. Just announced we now control the oil reserves of a country we've sanctioned for seven years.
The same Venezuela we've been calling a socialist hellscape since 2017. The same Maduro regime we've refused to recognize as legitimate. That Venezuela. We're business partners now.
Retail traders saw the post and immediately started googling which ETFs give them exposure to Venezuelan crude. Zero awareness that this is the kind of announcement that gets walked back in 48 hours when someone explains how international law works. Zero concern that the deal might not be real. Just pure uncut excitement about finally getting that geopolitical alpha they've been chasing since they bought Lockheed Martin calls during the last military strike they read about on Twitter.
Sixty-five billion barrels sounds like a lot until you remember the United States consumes about 20 million barrels per day. Quick math says that's an 8-year supply if we used every drop and Venezuela somehow produced it all tomorrow. Except Venezuela's state oil company is held together with duct tape and spite. Their production collapsed from 3 million barrels a day in the 1990s to under 800,000 now. Majority control of a broken infrastructure play. Brilliant.
Someone's going to put this in a portfolio labeled Energy Security and act like they're Warren Buffett because they read a Trump post before the algos did. They'll ignore that nothing about this deal has been confirmed by Venezuela. They'll ignore that oil futures didn't move. They'll buy anyway.
Because when you're that stupid, even the rumor of a nationalization scheme sounds like a buying opportunity.
Photo by Jorge Brito on Unsplash
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