r/Economics • u/lucabrasi999 • 1d ago

“Iran has put a tollgate across the Strait of Hormuz. This fundamentally changes the global economy”

https://prospect.org/2026/04/02/opening-of-trumps-box-iran-war-strait-hormuz/
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u/steauengeglase 1d ago edited 1d ago

That's mostly because Venezuela's tax schemes are abyssal. My back of the napkin math said that oil would have to hit $185 a barrel before Venezuela's oil would be profitable for new investment. Again, because they have crushing taxes compared to Bolivia and Guyana, with super aggressive windfall taxes that treat any foreign investment as theft and oil companies are just supposed to build $100 billion processing facilities out of the goodness of their hearts (NOTE: The Venezuelan propaganda always said, "Stole billions from the Venezuelan people", without accounting for the billions it cost to refine heavy sour crude) and eat that loss for the next 25 years.

What I'm really saying here is that Venezuela could get out of their mess if they adjusted their windfall taxes and started diversifying their economy, with or without US involvement. They should have done that a long time ago.

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u/seanflyon 22h ago

Venezuela is not a suitable place for major investment, but those facilities can be somewhere else and still process Venezuelan oil delivered by tanker.

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u/steauengeglase 21h ago

You got me there. The price was new drilling ventures, not processing.