Michael Burry's big play off the U.S.-Venezuela situation, which the investor has held for years

Michael Burry's quiescent stake connected Venezuelan lipid is coming backmost into focus.

The capitalist champion known for "The Big Short" said helium has owned Valero Energy since 2020, a presumption helium views arsenic progressively charismatic arsenic the U.S. moves toward a deeper relation successful reviving Venezuela's lipid industry.

"Realize that galore Gulf Coast refineries were purpose-built for Venezuelan dense crude," Burry wrote successful a Monday blog station connected Substack. "So they person been moving with suboptimal feedstock for years. This will, successful time, nutrient amended margins crossed pitchy fuel, asphalt, and diesel...I person owned Valero since 2020, and I americium much resolved to holding it adjacent longer aft this weekend."

His comments came aft President Donald Trump called connected U.S. lipid companies to put successful Venezuela aft the overthrow of President Nicolas Maduro. Venezuela, a founding subordinate of OPEC, sits connected the largest proven crude lipid reserves successful the world. The country's lipid is among the heaviest and astir sulfur-laden successful the world, and lone a constricted fig of refineries are equipped to process it efficiently.

Valero stands retired due to the fact that of its quality to process dense crude, but Burry said smaller refiners specified arsenic PBF Energy and HF Sinclair could besides benefit, adjacent if Venezuelan lipid arrives lone gradually. Any meaningful betterment successful exports is apt to instrumentality years.

Multiple analysts connected Wall Street are besides highlighting Valero arsenic the biggest beneficiary, should Venezuelan proviso increase. Shares of the refiner jumped astir 10% Monday.

The accidental whitethorn widen beyond refining. Venezuela's lipid infrastructure has deteriorated aft decades of underinvestment, creating imaginable request for U.S. oilfield services companies if large-scale rehabilitation begins, Burry said.

Burry said helium owns Halliburton, and sees imaginable upside arsenic good for Schlumberger and Baker Hughes, which could beryllium tapped to assistance rebuild pipelines and refineries.

"Venezuelan pipelines and refineries are aged and successful disrepair. This enactment volition spell to U.S. contractors," helium said. "Chevron is already there. Exxon and others person been litigating claims for decades and whitethorn spot immoderate justness comparatively soon, if the US virtually begins to tally Venezuela arsenic immoderate person suggested. I ain Halliburton, and whitethorn bargain much shares oregon LEAPs."

LEAPs, oregon semipermanent equity anticipation securities, are options with lengthy expiration dates that could spell beyond 1 year.