Venezuela’s infrastructure is broken. Pipelines are 50 years old and leaking. It will take billions and years of work by companies like **Schlumberger** and **Halliburton** to get production back to 2 million barrels per day.
Now to the reffineries:
The real money in this scenario is made through the crack spread, which is the profit margin a refinery earns by turning raw crude into products like diesel and jet fuel. When cheap Venezuelan heavy oil enters the market, the input costs for complex refiners like **Valero** or **Marathon Petroleum** drop drastically. Since they sell their finished fuel at global market prices, their margins expand even if the overall price of oil is falling.
Logistics:
The shift in tanker routes would be dramatic and rapid. Currently, Venezuelan oil moves on ghost tankers to Asia via secretive ship-to-ship transfers to bypass sanctions. A political shift would redirect this flow back to its natural market in the United States. Instead of a forty-day journey to China, the oil would only take four days to reach refineries in Houston or Lake Charles. (any suggestions?)
Finally, you have to consider the impact on the US shale industry. If the return of Venezuelan barrels pushes the price of WTI crude below the fifty dollar mark, many US producers in places like the Permian Basin will no longer be profitable(?).