One of Hugo Chávez’s longtime favorite stunts has been to threaten to halt oil exports to the U.S., disrupting America’s energy supply and roiling global energy markets. But these threats no longer carry much weight—not because of his ailing health but because the U.S. doesn’t rely heavily on Venezuelan oil anymore. According to estimates from the Financial Times, net U.S. imports of Venezuelan oil are at their lowest level since 1984:
The sharp drop is due to three factors. Overall US oil imports are down on the back of the shale boom. In addition, the closure of a large refinery in the US Virgin Islands co-owned by Petróleos de Venezuela (Pdvsa) has further reduced imports of Venezuelan-origin oil products. And more recently, Venezuela has started to import large amounts of US-made gasoline to offset a local shortage.
The reduction in US imports of Venezuelan-origin crude and oil products has been going on for the last five years. The new factor is the surge in US exports of oil products into Venezuela. In September, US refiners shipped a record of 196,000 b/d of gasoline and other oil products to Caracas.
Venezuelan local shortages are due in part to an outage in the Amuay refinery, where a large explosion in August killed 39 people. Production has been continuously postponed since the accident. The incident and the inability to restore full production have been cited by many as examples of the effects of Chavista cronyism and poor management on the worsening state of Venezuela’s infrastructure.
A decade ago, this might have been a serious problem for America, but no more. With the energy boom and the use of new drilling technology, our domestic production has been more than enough to pick up the slack. As the U.S. produces more oil for itself and for others, ankle-biters like Chávez are losing their ability to needle us with irresponsible threats. Russia, which is no stranger to these tactics itself, should take note.
The energy revolution is the gift that keeps on giving.