Andrea Perez-Sobers
Senior Reporter
andrea.perez-sobers@guardian.co.tt
US President Donald Trump’s move to take control of 65 million barrels of Venezuelan oil could create an unexpected opening for Trinidad and Tobago, particularly for the long-stalled Pointe-a-Pierre refinery.
But energy expert Dr Vincent Adams is warning that any benefit to T&T will depend heavily on the United States’ strategic interests, the commercial priorities of US oil companies and the political relationship between Washington and Port of Spain.
For T&T, the immediate attraction is Venezuelan crude as a potential source of feedstock for the refinery, allowing the facility to produce fuel products for the domestic and regional markets.
However, Adams who was a senior manager at the US Department of Energy until his retirement in 2016, cautions that Trinidad should not assume the crude will automatically come its way.
The United States’ “America First” posture, combined with Trump’s drive to increase American oil supplies and lower domestic energy prices, could see US refineries take priority over Caribbean buyers.
Speaking to the Sunday Business last Thursday, Adams described Trump as a transactional president whose long-standing objective has been to bring as much oil as possible under US control.
“President Trump is a transactionalist; there’s no question about it,” Adams said. “And this here has always been his objective to be in control of as much oil as possible.”
Adams argued that Trump’s energy policy has consistently centred on increasing oil production and opening more areas for drilling, with the wider objective of securing energy supplies and lowering prices.
He believes the Venezuelan development is particularly attractive to Trump because it gives the United States greater access to a major oil resource while potentially increasing supplies and helping to bring down energy prices.
Trump has made lower energy prices a central part of his economic message.
The emphasis comes as the US national average petrol price remains above US$4 a gallon, less than two months before the US midterm elections.
The backdrop is also one of heightened pressure on global oil markets. The war by the US and Israel in Iran has disrupted a significant percentage of the world’s oil supply, while billions of barrels of oil and fuel have been drawn from strategic stockpiles. US emergency oil reserves have also fallen to levels not seen since the early 1980s.
Against that backdrop, Adams believes Venezuela’s reserves represent a strategic prize for Washington.
Refinery faces US competition
The Pointe-a-Pierre refinery could provide T&T with a direct economic opportunity if Venezuelan crude becomes available to buyers in the Caribbean.
The refinery was once a major component of T&T’s energy infrastructure and remains central to discussions about restoring domestic refining capacity and reducing dependence on imported petroleum products.
Venezuelan crude, given its proximity to T&T, could theoretically provide a natural source of feedstock.
But Adams who is Guyanese born, warned that Trinidad would be competing with US refineries, including facilities operated by major oil companies expected to become increasingly involved in Venezuela.
“They’re not going to take it to Trinidad when they can take it to the U.S. They’re going to want to fill their refineries, to provide oil for their refineries and to make products out of it,” Adams explained.
He pointed to the commercial interests of the major oil companies entering Venezuela, including ExxonMobil, arguing that these companies have their own refining infrastructure and markets in the United States.
Adams said this could make it more commercially attractive for Venezuelan crude to flow north rather than east to Trinidad.
But that does not completely close the door on T&T.
Adams believes the country’s relationship with Washington could become an important factor in determining whether it gains from the new Venezuelan oil landscape.
He pointed to Prime Minister Kamla Persad-Bissessar’s strong public support for the United States, arguing that this could carry weight with Trump.
“Trump loves and adores people who are loyal to him, who pledge allegiance to him,” Adams said, adding, “He values those foreign relationships a great deal.”
Adams believes T&T could therefore find itself in a stronger position than some other Caribbean countries if the Government maintains its relationship with Washington, while presenting the country as a useful regional energy partner.
“Trinidad may very well benefit,” he said, while cautioning that “it’s hard to predict right now.”
For Adams, that uncertainty is central to T&T’s prospects.
While the refinery may require relatively modest quantities of crude compared with the volumes needed by major US refineries, any decision to direct Venezuelan oil to Trinidad would ultimately depend on the commercial and political calculations of the US administration and the companies involved.
Gas opportunity takes centre stage
While Venezuelan oil may offer T&T a potential refinery opportunity, Adams believes the country’s interests in Venezuela’s offshore natural gas resources could prove even more significant.
T&T has been pursuing opportunities involving cross-border and near-border gas resources, particularly Venezuelan fields that could potentially supply the country’s energy industry.
The changing US role in Venezuela could affect those negotiations in ways that are difficult to predict.
Adams believes greater US control over Venezuela could ease political tensions between Caracas and its neighbours, including T&T and Guyana.
He pointed to recent diplomatic engagement between Port of Spain and Caracas as a sign that the relationship could be entering a different phase.
The energy expert believes Washington could now play a decisive role in Venezuela’s external relationships.
“It’s really the US government that is going to dictate the policies and relationships in that region,” Adams said.
“There is no question.”
For T&T, that could potentially make negotiations over Venezuelan gas easier if the country remains closely aligned with Washington.
Adams also believes the changing dynamics could help ease tensions between Venezuela and Guyana over the Essequibo dispute.
“This here is going to help Guyana without question in terms of detention. It’s going to ease all the tension,” he said.
Adams’ broader assessment is that the energy map of the southern Caribbean is changing rapidly, with the United States emerging as a far more influential player in Venezuela’s oil sector and political affairs.
He believes that could create opportunities for T&T if the country can position itself between Venezuelan resources, regional markets and US interests.
The natural gas opportunity is particularly important because Venezuela’s energy profile is dominated by oil, while T&T has developed extensive expertise and infrastructure around natural gas, liquefaction, petrochemicals and downstream energy processing.
Adams sees the possibility of complementary roles emerging between the two countries.
“Trinidad might be producing the gas, and of course Venezuela the oil,” he said.
He stressed, however, that such an outcome remains speculative.
“There’s no telling,” Adams said.
The energy expert suggested that Trump’s preference for practical, transactional solutions could even lead to new possibilities for companies operating in Venezuela’s gas sector.
“He’s always looking for simplistic, practical ways of doing things,” Adams said. “So who knows what ideas he might decide to come up with, or the companies might come up with, to even expand into that gas field that Trinidad is interested in.”
America First could determine T&T’s gains
The challenge for T&T is therefore to distinguish between what is commercially possible and what is politically achievable.
Venezuela’s oil resources are potentially transformative, but the US has its own priorities.
Adams believes keeping American energy prices low is at the heart of Trump’s Venezuela strategy.
“He’s also all about keeping gas prices down in the United States. That is number one priority,” Adams said.
He argued that the importance of energy prices goes far beyond what consumers pay at the pump.
“Energy prices impact the entire economy,” Adams said.
“And he would do anything to bring prices down, especially energy prices, because energy prices impact the entire economy.”
That could put T&T in a difficult position if it seeks Venezuelan crude at the same time that US companies are looking to secure feedstock for their own refineries.
At the same time, Adams believes T&T’s close political alignment with Washington could give it an opening.
He contrasted the country’s approach with other Caribbean governments that have been more cautious in their public positions towards the United States.
“Some of the other countries in the Caribbean, they’ve either stayed silent or have been very careful in what they say,” Adams said.
“But I think she’s full-throated in supporting the United States in everything that they’re doing.”
