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Energy

China Gets Venezuela Oil Deal, Benefits US

Photo of Douglas A. McIntyre
By Douglas A. McIntyre Published

The US has plenty of problems with Venezuela’s mentally troubled dictator Hugo Chavez. The most recent confrontation has been over Chavez financing guerrillas in neighboring Columbia.

While the two nations throw bricks at one another, China has slipped in a side door and cut a huge refinery deal with the Latin American country. Under the terms about 400,000 barrels a day will be produced in Venezuela’s Orinoco Belt. The new refinery there will be built by the Chinese.

According to Bloomberg "The venture between Petroleos de Venezuela SA and China National Petroleum Corp. will pump oil from an area called Junin 4."

At first pass, the deal might seem bad for the US, but the opposite may be true. If Venezuela and China can bring new supply and refinery facilities online, it cuts supply which the most populated country in the world would have to get somewhere else. That may serve to take some upward price pressure off of oil prices over time.

It is the first favor Venezuela has done the US since Chavez was elected.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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