Burry Says Venezuela Oil Shift Could Pressure Russia's Energy Revenues

Investor Michael Burry (Trades, Portfolio), who correctly anticipated the 2008 subprime mortgage crisis, wrote in his Cassandra Unchained Substack that Russia could face growing pressure following the U.S. capture of Venezuelan President Nicolas Maduro over the weekend. Burry suggested that if the U.S. succeeds in lifting Venezuelan oil production over a five-to-seven-year period, the added supply could weaken Russia's oil revenues and longer-term influence. Shortly after Maduro's capture, current U.S. President Donald Trump said the U.S. would become more involved with Venezuela's oil sector, placing responsibility on U.S. oil companies to invest billions to rebuild infrastructure and stating that the oil would be sold to other countries.Venezuela holds about 19% of global oil reserves, roughly 300 billion barrels according to the Energy Institute, yet produces only a fraction of its potential due to outdated infrastructure, mismanagement, and U.S. sanctions. Boston College economist Aleksandar Tomic said that a sustained increase in Venezuelan production could affect global oil prices, which could be particularly damaging for Russia given its dependence on oil and gas revenues. Tomic noted that oil exports remain Russia's financial lifeline, funding its war in Ukraine, with the sector accounting for about 20% of GDP on average, according to the Oxford Institute for Energy Studies, even as Russia continues exporting oil to countries such as China and India.At the same time, the outlook remains uncertain over who will ultimately govern Venezuela and how its oil reserves will be managed, despite Trump's claim that the U.S. will run the country. Vice President Delcy Rodriguez was sworn in as interim president, but it remains unclear whether major U.S. producers would return after past exits by ConocoPhillips and Exxon Mobil , both of which pursued arbitration over expropriated assets. Chevron , the only U.S. oil company currently operating in Venezuela, has said it supports rebuilding the country's economy when circumstances change, even as economists warn that higher Venezuelan output could also pressure oil prices and weigh on U.S. producers' profits, despite U.S. production being projected by the Energy Information Administration to peak in 2027 before leveling off and later declining