What is the threat of the US-Venezuelan conflict to the Russian oil industry?

Alexey Gromov, Principal Director on Energy studies at the Institute for Energy and Finance, commented on the consequences of a possible US military operation against the political leadership of Venezuela for Russian oil assets in this country to the Neft and Capital Internet portal.

Alexey Gromov said that by supplying naphtha, Russia, in fact, helps Venezuela in organizing its oil exports. The grades in Caracas are extremely heavy, so they require dilution with either light oil from the United States or naphtha from Russia.

"For us, the potential loss of exports of petroleum products to such a Latin American country is not critical. But Venezuela will have fewer opportunities to organize the sale of its oil abroad.

If there is a change of power in this country due to the direct impact of the United States, then this will be beneficial to American oil refining. Refineries on the Gulf Coast in the United States will no longer have to purchase Middle Eastern oil, which they now need to dilute American light grades from shale production. This task will be performed, as it was before, by Venezuelan oil," the expert explained.

Alexey Gromov also recalled that in addition to supplying naphtha, the Russian Federation is also present at a number of mining projects in Venezuela. Although this is no longer on the same scale as it was before the 2010s, companies from Russia have a strategic interest in the Latin American country's oil industry. However, just like the Chinese ones. That is why neither Moscow nor Beijing will completely ignore what is happening in this country.

"If Venezuela falls into the orbit of American oil companies, then the country will begin a serious increase in production. However, due to the fact that the industry has been underinvested for years and requires major infrastructure modernization, its restoration will take at least 3-5 years," the analyst believes.