Attention on Burry's energy bet amid Venezuela political turmoil and Big Short

Source: BlockMedia Original Title: Venezuela Political Uncertainty Sparks Attention on Michael Burry’s Energy Bets Original Link: As changes in US-Venezuela relations emerge as a variable in the global energy market, Michael Burry’s longstanding energy bets, made famous by ‘The Big Short,’ are once again drawing attention.

Michael Burry has held shares in US refiner Valero Energy( since 2020, and recently, as the likelihood of the US being involved in rebuilding Venezuela’s oil industry increases, the attractiveness of this position has grown.

Burry stated, “Many refineries along the Gulf Coast were originally designed to process Venezuelan heavy crude,” and “Although they have been using inefficient crude oil so far, if Venezuelan oil supply resumes, margins in jet fuel, asphalt, and diesel could improve.” He added, “Valero has held these positions since 2020, and after this weekend, my confidence in holding long-term has increased.”

Venezuela is a founding member of the Organization of the Petroleum Exporting Countries) (OPEC(), and possesses the world’s largest proven reserves. However, due to the heavy nature of its crude and high sulfur content, the refining capacity to process it is limited.

In the market, Valero is considered the most directly benefiting company in this context. Burry evaluated, “Not only Valero, but some smaller refiners like PBF Energy and HF Sinclair could also benefit gradually from the influx of Venezuelan crude.” However, he predicted that significant export recovery would take considerable time.

Wall Street shares a similar view. Analyses suggest that if Venezuelan crude supply increases, Valero, with its capacity to process heavy crude, could be the biggest beneficiary. In fact, Valero’s stock surged by about 10%.

Burry also emphasized that his opportunities are not limited to the refining sector. “Decades of underinvestment have severely aged Venezuela’s oil infrastructure,” he said, “and once full-scale reconstruction begins, demand for US oilfield service companies could rise.”

He revealed that he owns Halliburton and mentioned that Schlumberger and Baker Hughes are also likely to participate in the pipeline and refinery reconstruction process. “Most of Venezuela’s pipelines and refineries are aging, and related projects are likely to be awarded to US contractors,” he stated.

While the market is closely watching whether the normalization of US-Venezuela relations will lead to actual increases in oil supply and infrastructure investments, there is keen interest in whether Burry’s long-term bets were once again a proactive investment move.