Oil Chiefs Lukewarm as Trump Pushes $100 Billion Venezuela Plan

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1:58The Bloomberg Business Week Daily Podcast with Carol Masser and Tim Stenevek on Bloomberg Radio. I want to bring in Ellen Wald, president of Transversal Consulting, senior fellow at the Atlantic Council. She's also the author of Saudi Inc. It's the history of Saudi Arabia and Aramco. She joins us from Florida. Ellen, as Carol mentioned, lots of headlines coming from the White House right now. I won't rehash them. But what I want to hear from you is if that's enough to get these oil executives to make commitments to the tune of tens of billions of dollars in Venezuela. I think we have to take these announcements with a bit of a grain of salt.

2:37I do think that oil executives are always excited to invest in areas where there's oil. But I do think that that what they're saying, and I'm not sure if this is being communicated quite so strongly by the Trump administration, is that they need rule of law, they need political stability, and they need assurances that contracts will be honored. Because a lot of these companies have been burned twice by Venezuela. And this is not the easiest oil to drill for. I mean, we're talking about very sludgy, tar sand-like oil that requires, you know, billions of dollars in upgraders just to transport it, to get it to the ships, to get it out of Venezuela.

3:19So this is a big investment. It's not like, you know, a shale oil well out in the Permian. And so I do think if the White House is going to assure this, they're going to have to provide some kind of proof that, you know, their investments are being made in good faith, that these contracts will be honored. And I think that if they can do this, and if they show that they can do this, then companies will be willing to invest whether or not that oil is not going to hit the market in the next year or so. These are still projects that take a lot of time and money and effort. And so it's going to be quite a while until new oil, or at least oil from these investments, and until we can increase Venezuela's output and actually get that to the market, But regardless of whether they start tomorrow or next year, it's still going to take quite some time.

4:11Weigh in on what we just heard from the Secretary of Energy. As the president said, he's an oil man with certainly an oil background, a former oil executive. He talked about record production in the U.S. And what he also talked about, Ellen, was the fact that even though the U.S. has less oil, its production is so much higher as a result of the technology that we have here and the investments that we've made. Talk a little bit about what we just heard from the energy secretary. Yeah, I think I think he's exactly right. And he also highlighted our rule of law and the systems that we have in place that make it possible for businesses to, you know, have security to make these kinds of investments, which are quite risky and to develop the technology that we need to successfully and also environmentally consciously exploit these very important resources, which can and have raised our standard of living to very incredible heights, particularly when you are comparing the situation to what's going on in Venezuela.

5:08And so I think he's exactly right. The question is, can they bring that to Venezuela? Can the U.S. actually provide assurances? And will they be able to do this? Because Venezuela's oil is still, as I mentioned, quite difficult to access, requires a lot of investment and is quite expensive to produce. Now, it may be that U.S. companies and other companies can bring new technology that will lower those costs of production, which would be an incredible thing for Venezuela, for the people of Venezuela, and also for these oil companies. But whether they can be assured that they will have this security, I really think the administration has to deliver on this.

5:48And that's clearly the biggest point here. Ellen, one of the things that I found interesting when the energy secretary was speaking. He was talking about record production of energy, oil, here in the United States. The U.S., it's quite a success story, many would say, in terms of what they have done in terms of oil exploration and discovery and output. So do we need Venezuela? I'm trying to understand the relationship, and especially as we hear from President Trump basically saying that he will closely integrate the Venezuelan and U.S. economies. I just kind of don't understand how this all works and why it's even needed.

6:31Not for the people of Venezuela who need a better way forward. Absolutely. But I'm just trying to understand. Yeah, I think that there are two key points here. One is, yes, U.S., the incredible heights that we've been able to achieve with our production are incredibly admirable, but then one has to ask the question, do we really need more oil? Do we really need more oil from Venezuela? I think the answer is twofold. Technically, I think we're quite well supplied at the moment. However, Venezuelan oil could be very advantageous for the Trump administration in terms of replacing Russian oil. So if they want to put more pressure on Russia and kind of squeeze Russia's customer base, they can do that by replacing some of Russian oil with Venezuelan oil.

7:15So, for example, I know that a major Indian refiner that's been known for importing a lot of Russian oil in contravention of sanctions is inquiring about importing Venezuelan oil instead. So that could be a useful, I would say, foreign policy tool. So I'm so glad you brought this up. It's like it's like you're kind of reading what you're in two places at once. You've been talking to China, maybe. We're getting some headlines from the president right now. He says that he told China and Russia, we don't want them in Venezuela. But the president also saying China can buy all the oil they want from us, from the U.S.

7:48and from Venezuela is back to your comment that this could be a foreign policy tool. How do you read that? Yeah, I mean, I think that it's the same thing, because any way that they can squeeze Russian oil out of the market is helpful leverage for Trump over Putin, because the best way to squeeze Putin and to get him to come to that negotiating table and maybe to make some more compromises is if he feels that his revenue is being squeezed. So I do see it in that respect. In terms of the larger oil market, though, Venezuela's oil, I think, has the potential to play a very important and crucial role in later decades.

8:29We may not need it now, but overall investment in long-term projects is way down. And so all the indications are that, you know, 2040 and beyond, we are going to need more oil. And Venezuela does have the potential to provide it. That's what we were talking to Kevin Crowley about of our Bloomberg News team based in Houston just a little earlier, because the question that we've had, Carol, that we've been talking about is, well, we're awash in oil right now. Now, oil's, what,$60 to$64 a barrel. Is that a price that supports all this investment? Yeah. So, Ellen, is that what this is about? And is that kind of a smart strategy going forward in terms of thinking much longer term?

9:07And I do think about we often criticize the United States for being short term, four years to four years in terms of who's in the White House potentially. So is this kind of a smart, long-term strategy that's been put out by President Trump, whether or not you agree with the methods or the strategy or the specifics, does it make sense longer term? I would say that it definitely makes sense in the longer term. And I believe a lot of the big oil companies are thinking that way because they think in much longer term blocks than, you know, a typical four year term. So, you know, in their minds, you know, President Trump's term is basically over in the terms that they think about and in terms of these long term projects.

9:47And so if they can get assurances that these things are going, that these safeguards are going to continue past President Trump's term, then, you know, the potential investments could make much more sense. But this idea that, you know, suddenly I think that they remain cautious because President Trump talks about, you know, we're going to put so much more oil on the market and prices are going to go down to$50 a barrel. That's not helpful for them. And that doesn't give them confidence to invest either. So I do think that if he does have a grander policy strategy and oil strategy, hopefully he's explained this to the oil executives and maybe managed to satisfy them.

10:27Or perhaps he hasn't. And, you know, they still remain somewhat wary. All right. Ellen, thank you so much. Dr. Ellen Wald, always appreciate your perspective in walking us through some of the headlines that we are getting out of this event. She is president of Transversal Consulting, senior fellow at the Atlantic Council, author of Saudi Inc. Stay with us. More from Bloomberg Businessweek Daily coming up after this. They told us to expect change. They warned us about the transition. But honestly, they forgot the best part. This is the chapter where we finally focus on us. LifeMD delivers expert menopause and midlife care right from your home.

11:09From hormone health to holistic wellness, LifeMD helps you feel your best for the best years of your life. LifeMD, it's just getting good. Visit lifemd.com slash goodlife.

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12:29You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 p.m. Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube. I want to bring in Rockford Weitz, professor of practice and director of the Maritime Studies Program at Tufts University's Fletcher School of Law and Diplomacy. He joins us from Medford, Massachusetts. Rocky, I do want to thank you for your patience as we heard from the president and oil executives and members of the president's cabin over the last hour or so. We do thank you for sticking by.

13:03A lot of places we want to go with you, but I want to start with something the president said just at the end of what we heard him say. just now. And it was about making sure that the U.S. went to Venezuela. So China and Russia didn't. Do you agree with him that had the U.S. not gone there, China or Russia would have gotten power through Venezuela? So the short answer is yes. And no problem waiting. That was a fascinating press conference. So happy to talk about a bunch of different things. The short answer is correct, that both Russia and China were making inroads into Venezuela under the Maduro regime.

13:43That era ended on January 3rd. Wow. OK. Who was more likely to get control? And what did they want to do in Venezuela? Like, what would have they used not just Venezuelan assets, perhaps, for but maybe Venezuela territory for? Well, so I should I should clarify a little bit. So So not really controlled, just be the sort of primary great power ally of Venezuela, which is a relatively small country, especially when you're comparing to China and Russia and the United States. So what they were looking for, so different things. Russia was looking for basing rights in the Americas for their navy and their air force, also potentially some of the critical minerals that— Venezuela is a very resource-rich country, not just with crude oil, but also with critical minerals and many, many other things.

14:40China was looking, has an interest in the oil and also the critical minerals and also perhaps long term, perhaps basing rights for their Navy or Air Force. But they were really focused on economics as part of their Belt and Road Initiative. It sounds, listening to President Trump, that the commercial piece of it will continue with China, at least. I don't think there's that much commerce naturally happening between Russia and Venezuela, though Russia, of course, is under sanctions from the United States. What do you make of, you know, when the president says, and I'm looking for the headline here, that the United States will closely integrate the Venezuelan and U.S.

15:28economies? What exactly does that mean? Well, so the honest answer is we'll see what it means. What I think it means is essentially a return to the past in the sense that Venezuela and the United States were highly integrated economies for much of the 20th century, if not all of the 20th century. Essentially, once Chavez took power in 1999, things started to change. But the United States and the Venezuelan economies were very much integrated economically, particularly with their oil industry. Their oil, which President Trump actually correctly said, is really very good for making asphalt. It's not the best oil.

16:13It's very expensive to refine. And we have refineries designed almost specifically to refine the very heavy crude oil that Venezuela produces. And those trade flows continued actually even under Chavez and Maduro because of the economic interest. So I'm happy to elaborate on any of those. I guess what I'm just trying to understand is what's the key takeaway? In some of the conversations we've had today, Professor Weitz, there's an understanding that we know we need more power and more energy in all its forms, whether it's carbon-based, whether it's renewable, whether it's nuclear. And maybe even though the world and the U.S.

16:59is washed in oil today, longer term, we need to develop this. So maybe this is a smart, longer-term strategy for the United States. So I'm wondering, is that what this is about, that mineral, raw material grab that needs to be done that the whole world kind of seems to be a part of? But I also do wonder about what this means geopolitically about President Trump when it comes to Russia and President Xi, Russian's president to Putin, who he says he gets along with. But again, he seems to be sending them a very strong message. He also has talked about he was questioned about Greenland and saying we can do it the easy way or the hard way.

17:37But basically, we want Greenland. So I'm just trying to understand what the big takeaway is. what's the most important aspect of all this? We see all these oil executives, but I wonder if it's really something else. Oh, OK. That's a that's a very interesting question. Let me see if I can. So I think it's hard to come up with one key takeaway, given the wide ranging conversation that was that press conference. So why don't I try for three? So I think the three key takeaways from that press conference are for number one, the Trump administration is implementing its new national security strategy, which was issued in December, that essentially says the United States is going to become or not become, but strengthen its position as the primary great power operating in the Americas.

18:31Box checked because with Venezuela, a regime that was not friendly to the United States is now being transitioned to a more U.S. friendly regime, though that'll take some that's going to be a hard challenge that's number one number two um the other great powers are uncomfortable today uh russia is very uncomfortable um we can talk about the uh the seizures of russian tankers dark fleet tankers this to me is the second key takeaway which is what has happened, it's related to Venezuela. So what President Putin has been trying to do to Zelensky and Ukraine, which is depose Zelensky and essentially become the great power where Ukraine is in its sphere of influence.

19:24They've been trying to do that for almost four years. It'll be four years. The anniversary of four years anniversary will be on February 24th, 2022. President Trump did that effort with Maduro in less than four hours. What that showed is, and this is the second key takeaway, is that the United States military is significantly stronger than the Russian military. And how that ripple effect came to the tankers is that the tanker that was seized just south of Iceland, the Maranera, it had been it had tried to re-flag as a Russian flag. Right. And we can go into why that wouldn't work. But basically it had a Navy escort, a Russian submarine escort.

20:11And it was still seized by the Coast Guard. So we could talk about that. So your point is, by doing what they did in Venezuela has shown the military might of the United States. And so that's the second key takeaway. So one third one when you're ready. So President Putin take heed, President Xi take heed, world take heed. And just quickly what your third point is. The third point is that we're still in. So Trump still almost can't help himself continues talking about Denmark and Greenland as I mean, it is. So Denmark is part of North America. And I'm happy I'm the Arctic lead at the Fletcher School.

20:54And I know the Greenlandic prime minister and foreign minister. We love this. Go. I have lots of opinions on that. But essentially, the third key takeaway is that there's going to be some kind of arrangement or at least discussion. That's all public negotiation between the Danes and the Greenlanders in the United States. Unclear where that lands. But I have a lot of opinions on it, if you're interested. Well, we don't have much time, but the president did say on Greenland, we'll make a deal the easy way or the hard way. How is it going to go down in your view? And what is what is the easy way and what's the hard way?

21:29just very briefly. Yeah. OK, you got it. I'll be fast. So I said. So there's essentially three options for the United States, Greenland and Denmark. So the preferred one, in my opinion, is a diplomatic solution where where Greenland. So Greenland has been seeking some kind of independence from Denmark for a while. How that actually. So the way to think about it is what is the position of Greenland in the 21st century. And the easy way is to solve that through kind of friendly diplomacy, because we actually are all friends. There's another option, which would be that the United States actually purchases Greenland like it purchased the U.S.

22:09Virgin Islands from Denmark about 100 years ago. And then the third option, which I think is completely unrealistic, would be a military acquisition of it. And I almost think it's almost not worth talking about, to quote Senator Kennedy, that's weapons grade stupid. But what's likely? And you're saying something's going to happen and the U.S. is going to increase its presence there and control over this. That's the bottom line. And what do you think is likely the path there? All right. I'll quote a Greenlandic friend of mine. Here's what's going to happen. Trump will help make Greenland great again.

22:44What is that? And I can tell you what I think the scenario is. Which is what? That Greenland may actually become independent from Denmark, may join NATO, may join the Arctic Council as the ninth member. Doesn't mean Denmark is not part of the Arctic Council. Still is the Faroe Islands, so it's still an Arctic nation. And essentially, Greenland positions itself as a new independent country for the 21st century with a security alliance with the United States, but still part of NATO, becomes part of the formerly part of the Arctic Council. And I think that's probably what would happen in the next year or two.

23:24I feel like I just want to go, whoa, because it does feel like the world is being being divvied up a little bit. Yeah. And I think we're probably going to be calling on Rocky again in the near future. Rocky, thank you so much. Appreciate your time, Rocky. Is there any other parts of the world, 30 seconds, that we should be watching that there's something else? Carol can't say goodbye. I know, I can't say goodbye. Just 30 seconds. Is there anything else in the world that we should be watching? Keep an eye on Iran. Keep an eye on Iran. I think we might see a change of government in Iran in the next 30 days.

23:59All right. Rocky White's professor of practice and director of the Maritime Studies program at Tufts University's Fletcher School of Law and diplomacy. He's got his JD from Harvard Law as well. He joins us from Medford, Massachusetts. This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at 2 p.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg 1130. Now let's get to that monthly jobs report and actually all of it with our next guest who's been sitting by quietly listening.

24:37That kind of speaks to what's going on, Carol, when it's a Jobs Friday and this is the first time we've mentioned the Jobs Report. It's exactly right. Nine minutes in. Our next guest sees an economy that underscores a labor market stuck in low gear. And yet, as we've seen on the Bloomberg, traders see almost no chance of a rate cut following this morning's monthly Jobs Report. I want to dig into the data and the outlook. Gregory Dacos back with us, chief economist at EY Parthenon. He joins us here in the studio. It's the data that we've been counting down to all week. It turns out a report that you could have gotten an early peek at if you would have just been following the president on True Social.

25:08This is one way to increase engagement there, I guess. The weakness, it doesn't warrant another Fed cut? I think it could warrant another rate cut. I think that what we are seeing is ongoing weakening in the labor market. And what's very interesting is that we're seeing conflicting cross-currents when it comes to the labor market. On the one hand, we have labor supply that's come down dramatically for two reasons. One, demographics, that's a natural aging of the population, but two, and very importantly, significant immigration curbs. So you've got labor supply hit negatively quite significantly.

25:39But at the same time, labor demand is also softening. And I would argue labor demand has been softening faster than labor supply, leading to this gradual creep up in the unemployment rate. Nothing alarming yet, but there are warning signals here when we're seeing the unemployment rate gradually creep up over time. You know that in 2025, in the notes you shared with us, the economy added just 584 ,000 jobs, a stark slowdown compared to the 2 million gained in 2024. So 2025, just about half a million jobs there. This is the weakest annual increase outside of recession since 2003. So are we headed toward a recession?

26:20Does anything there? Like, when does it become more problematic? What we seem to hear when we have conversations around this is that once the labor market starts to slow down, it starts to slow down pretty quickly. That's the risk, right? And the negative story is indeed that we are seeing broad evidence of a labor market slowdown. Whether you look at job growth over the past three months, down$22 ,000 per month. Whether you look at job growth concentration, only half of the sectors in the private sector added jobs over the course of December. Or you look at the hiring rate at a 12-year low. All of these are indicators of very selective labor market demand.

26:57Does that mean a recession is on the horizon? Not necessarily, because the big element that we're seeing here that's very positive is productivity growth. Productivity growth has been increasing, has been accelerating. Wait, is Alan Greenspan in the room? Well, he might be, because what we are hearing from a lot of business leaders is that they're trying to do more with less. It's not AI yet, and that's actually a positive spin on the story. Well, then what is it? It's businesses that are coming out of an environment of high cost and high interest rates where they're trying to do more with less without incurring additional costs.