The U.S. Captures Venezuela's Oil and Lithium Reserves
The Price of Oil and 10YR Yields should dip.
Taking out VZ President Nicolás Maduro had zero to do with drug trafficking.
Venezuela is not a Fentanyl distributor and is not part of the cocaine trade’s Big 3: Columbia, Peru, and Bolivia. Overthrowing Maduro had everything to do with oil reserves (near-term gain for the U.S.) and lithium reserves (long-term play as lithium battery-powered use cases grow).
Venezuela’s oil production can be leveraged by the U.S. now while its lithium reserves have very little production and represent a longer-term play, offering an alternative to leading lithium producers: Australia, China, Chile, and Argentina.
The 10YR Treasury yield should trend down, as should the price of oil.
Not how I would do it. I would harvest Alaska’s enormous oil reserves, but the Trump Admin calculated it was politically easier and faster to overthrow Maduro than to build oil production capability in Alaska.
Exxon (XOM), Chevron (CVX) and Conoco (COP) won the day.