President Donald Trump is urging U.S. oil majors to rebuild Venezuela's shattered energy sector, but one veteran trading strategist warns that political promises alone cannot protect assets from future expropriation.
Baron Lamarre, former head of trading at Petronas, argues that unless the industry adopts a “trustless” digital infrastructure to track ownership, relying on “informal assurances” leaves the country fundamentally uninvestable for giants like Exxon Mobil Corp. (NYSE:XOM).
Digital ‘Trust Layer’
While the White House brokers $500 million in initial sales, as per a Reuters report, Lamarre—now co-founder of the International Digital Exchange (Index)—contends that traditional contracts are insufficient in a jurisdiction where “institutional trust has long been broken”.
Lamarre proposes tokenizing crude oil on the blockchain to create transparency. Unlike traditional equity investments, which expose companies to opaque state entities, tokenization allows investors to “ring-fence” specific barrels.
“Tokenization can credibly function as a trust layer,” Lamarre said. “It allows investors to gain exposure to specific… flows, rather than to opaque corporate or state entities”.
By engaging in programmable compliance, international majors could enforce sanctions filters and delivery conditions automatically, rather than relying on “discretionary trust”.
Fragile ‘US Premium’
Lamarre also cautioned that the reported 30% price premium on recent U.S.-brokered Venezuelan sales is not a sign of market recovery, but rather a temporary byproduct of American policy.
“I wouldn’t call this an artificial market; in fact, prices are now much closer to the crude’s fair market value,” Lamarre noted.
However, he warned that the premium’s sustainability “depends entirely on U.S. policy”. If Washington's support wavers or sanctions snap back, the deep discount will return immediately.
Solving The Cleanup Cost
Beyond political risk, physical degradation remains a massive barrier. To address the environmental cleanup, Lamarre proposes an “E-cost” or ecological premium embedded into every barrel sold.
“Foreign majors are commercial actors; they should participate financially, but not be expected to shoulder nation-building responsibilities,” Lamarre stated.
Under his proposed model, this premium would fund remediation without locking Western firms into indefinite liabilities.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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