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

Michael Burry’s quiet bet on Venezuelan oil is coming back into focus.

The investor best known for “The Big Short” said he has owned Valero Energy since 2020, a position he views as increasingly attractive as the U.S. moves toward a deeper role in reviving Venezuela’s oil industry.

“Realize that many Gulf Coast refineries were purpose-built for Venezuelan heavy crude,” Burry wrote in a Monday blog post on Substack. “So they have been running with suboptimal feedstock for years. This will, in time, produce better margins across jet fuel, asphalt, and diesel…I have owned Valero since 2020, and I am more resolved to holding it even longer after this weekend.”

His comments came after President Donald Trump called on U.S. oil companies to invest in Venezuela after the overthrow of President Nicolas Maduro. Venezuela, a founding member of OPEC, sits on the largest proven crude oil reserves in the world. The country’s oil is among the heaviest and most sulfur-laden in the world, and only a limited number of refineries are equipped to process it efficiently.

Valero stands out because of its ability to process heavy crude, but Burry said smaller refiners such as PBF Energy and HF Sinclair could also benefit, even if Venezuelan oil arrives only gradually. Any meaningful recovery in exports is likely to take years.

Multiple analysts on Wall Street are also highlighting Valero as the biggest beneficiary, should Venezuelan supply increase. Shares of the refiner jumped about 10% Monday.

The opportunity may extend beyond refining. Venezuela’s oil infrastructure has deteriorated after decades of underinvestment, creating potential demand for U.S. oilfield services companies if large-scale rehabilitation begins, Burry said.

Burry said he owns Halliburton, and sees possible upside as well for Schlumberger and Baker Hughes, which could be tapped to help rebuild pipelines and refineries.

“Venezuelan pipelines and refineries are old and in disrepair. This work will go to U.S. contractors,” he said. “Chevron is already there. Exxon and others have been litigating claims for decades and may see some justice relatively soon, if the US literally begins to run 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 lengthy expiration dates that could go beyond one year.