Venezuela's Maduro calls to seize oil-rich region of Guyana - Yahoo Finance

Venezuela’s Maduro calls to seize oil-rich region of Guyana

Venezuelan President Nicolás Maduro has made calls to seize part of neighboring country Guyana that has newly discovered oil reserves.

Yahoo Finance Senior Columnist Rick Newman expects a potential “skirmish” to occur in the region between Venezuela and Guyana, which could impact the Biden administration's origin al easing of sanctions on Venezuela from October.

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Video Transcript

RICK NEWMAN: A lot of people have never heard of Guyana. And if they had, they probably don't know that it's actually becoming a significant oil producer. These days, I notice anything that could affect global oil supplies either positively or negatively. So when Maduro in Venezuela said, oh, we're going to claim two-thirds of Guyana as our own, and that would include these oil fields, I perked up because the Biden administration has been basically scouring the globe trying to figure out where it can get just a little bit of additional oil supply going into 2024.

Including Venezuela, the Biden administration actually eased restrictions on Venezuela in October. They didn't come out and say why they did that, but I think it's pretty clear that they were hoping there could be a little more oil production out of Venezuela. And they are just trying to get-- even if it's just a couple 100,000 barrels of additional oil onto the market, they'll take it because Biden obviously scarred by gasoline prices in the United States that hit $5 a gallon in 2022.

His popularity rating plummeted along with that and it has not come back up. So the Biden White House clearly knows it has to keep gas prices down. So to go back to Guyana, Venezuela says, oh, we think we're just going to take over these oil fields now that people don't-- analysts don't think that means Venezuela is going to invade Guyana. It could, but it sounds like it's just like a shakedown.

Like Maduro in Venezuela is looking at what Vladimir Putin did in Ukraine, invaded-- surprise everybody invaded and got the world's attention. So it's he wants a little bit of a payment, a payoff from Guyana. So we had-- just this week, the Secretary of State Antony Blinken had a phone call with the president of Guyana, said, we support Guyana.

The Pentagon has said they're going to conduct military exercises with the tiny military force in Guyana. So I'm calling this another energy skirmish that we probably need to be paying attention to.

- Yeah. Well, and you make the great point that as we head into this election, the relationship with the US is going to be ever more critical. I'm curious when it comes to Venezuela versus the US and this story. Which do you anticipate having the bigger footprint on the oil coming out of this region as we head into 2024?

RICK NEWMAN: I mean, Venezuela is a train wreck of a country. We've had these corrupt and disastrous socialist regimes with Maduro and Hugo Chavez before him. Venezuela is actually really important to the United States for a couple of reasons. The Little Guyana to its South has 1% of the oil reserves of Venezuela and yet it is probably going to be producing more oil in Venezuela in just a couple of years. Because Venezuela's oil infrastructure is just so wrecked.

Venezuela, also a significant source of migrants to the United States that is causing President Biden so much trouble politically. A lot of those migrants come from Venezuela and that was another thing Biden tried to do with easing the October sanctions, was to get more people to stay in Venezuela instead of coming to the United States. So Venezuela is a multifaceted problem for the United States.

I mean, it's funny that Republicans say-- whenever they say the Democrats are taking a socialist turn, they're going to turn us into Venezuela. But we have all these people in Venezuela who want to escape socialism and come to the United States. And we've got a lot of people saying, no, don't let them in. So of all the problems in the world, and there are a lot of them-- Venezuela is popping up as another one.

- All right. Rick, thanks so much for continuing to keep tabs on this and breaking this down for us this morning.