Michael Burry attends the premiere of “The Big Short” at the Ziegfeld Theater on November 23, 2015 in New York.
Dimitrios Kambouris | Getty Images
Michael Burry's quiet bet on Venezuelan oil is coming back into focus.
The investor, best known for “The Big Short,” said he owned it Valero Energy Since 2020, he has found this position increasingly attractive as the US plays a more important role in revitalizing Venezuela's oil industry.
“Be aware that many Gulf Coast refineries were built specifically for Venezuelan heavy oil,” Burry wrote in a blog post Monday on Substack. “So they have been working with suboptimal raw materials for years. This will lead to better margins on jet fuel, asphalt and diesel over time… I have owned Valero since 2020 and am more determined to hold on for even longer after this weekend.”
His comments came after President Donald Trump called on U.S. oil companies to invest in Venezuela following the ouster of President Nicolás Maduro. Venezuela, a founding member of OPEC, has the largest proven crude oil reserves in the world. The country's oil is among the heaviest and most sulfur-rich in the world, and only a limited number of refineries are equipped to process it efficiently.
Valero stands out for its ability to process heavy crude oil, but Burry said smaller refineries such as PBF energy And HF Sinclair could also benefit, even if Venezuelan oil arrives only gradually. A significant recovery in exports is likely to take years.
Several Wall Street analysts also point to Valero as the biggest beneficiary if Venezuelan supply increases. Shares of the refining company rose about 10% on Monday.
The opportunity may extend beyond refinement. Venezuela's oil infrastructure has deteriorated after decades of underinvestment, creating potential demand for U.S. oilfield services companies as large-scale cleanup begins, Burry said.
Burry said he owned Halliburtonand also looks for Schlumberger and Baker Hugheswhich could be used to help rebuild pipelines and refineries.
“Venezuelan pipelines and refineries are old and in poor condition. This work is subcontracted to US contractors,” he said. “Chevron is already there. Exxon and others have been arguing claims for decades and could see justice relatively soon if the US literally starts ruling Venezuela, as some have suggested. I own Halliburton and may buy more shares or LEAPs.”
LEAPs, or Long-Term Equity Anticipation Securities, are options with long expiration dates that can extend beyond a year.