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A Quiet Position Comes Into Focus

Michael Burry, the hedge fund manager made famous by “The Big Short,” is once again drawing attention for a patient, high-conviction investment that he has held for years. Burry revealed that he has owned shares of Valero Energy since 2020 and now sees the position as even more attractive amid major geopolitical changes involving Venezuela’s oil sector.

Burry’s comments suggest that what began as a niche refining thesis could turn into a multi-year structural opportunity if Venezuelan crude makes its way back into global supply chains with U.S. involvement.

Why Venezuela Matters to U.S. Refiners

Venezuela holds the largest proven crude oil reserves in the world, surpassing Saudi Arabia. However, its oil is extremely heavy and sulfur-rich, making it difficult to process without specialized refining equipment. Only a limited number of refineries globally are designed to handle this type of feedstock efficiently.

Many refineries along the U.S. Gulf Coast were originally built specifically to process Venezuelan heavy crude. Years of sanctions, political instability, and underinvestment forced those refineries to rely on alternative inputs that are often less efficient or more expensive.

According to Burry, that mismatch has weighed on refining margins for years.

Valero’s Strategic Advantage

Valero stands out as one of the best-positioned beneficiaries if Venezuelan oil exports recover. The company operates some of the most complex refineries in North America, giving it the flexibility to process heavy crude grades that other refiners cannot handle profitably.

Burry noted that restoring access to Venezuelan crude could significantly improve margins across multiple fuel products, including jet fuel, diesel, and asphalt. Improved feedstock alignment alone could boost profitability without major capital investment.

Wall Street analysts appear to agree. Following renewed discussion around Venezuela’s oil future, Valero shares jumped roughly 10 percent in a single session, reflecting growing investor optimism.

Policy Shifts Change the Outlook

The renewed interest comes after President Donald Trump publicly called on U.S. oil companies to invest in Venezuela following the overthrow of former President Nicolás Maduro. While any recovery in Venezuelan oil output is likely to take years, even gradual increases could have meaningful implications for refiners configured for heavy crude.

Venezuela’s oil production has collapsed from more than 3 million barrels per day in the late 1990s to a fraction of that level today. Rebuilding output will require extensive capital, technology, and operational expertise, areas where U.S. companies have a competitive edge.

Smaller Refiners and Secondary Winners

While Valero is the most obvious beneficiary, Burry believes other refiners could also see upside. Companies such as PBF Energy and HF Sinclair operate facilities capable of processing heavier crude blends and could benefit if Venezuelan supply returns incrementally.

However, Burry cautioned that expectations should remain realistic. Infrastructure damage, labor shortages, and logistical challenges mean that Venezuela’s oil recovery will likely unfold over many years rather than months.

Oilfield Services Could See a Boom

Burry’s thesis extends beyond refining. Decades of neglect have left Venezuela’s pipelines, refineries, and export terminals in severe disrepair. Any serious effort to revive production would require large-scale rehabilitation.

That creates potential demand for U.S.-based oilfield services companies. Burry disclosed that he owns shares of Halliburton and sees additional upside for firms such as Schlumberger and Baker Hughes, which have deep experience rebuilding aging energy infrastructure worldwide.

He also pointed out that major U.S. oil companies already have historical ties to Venezuela. Chevron maintains a presence in the country, while Exxon and others have spent decades pursuing legal claims related to nationalized assets, claims that could gain traction under a new political framework.

A Long-Term, High-Conviction Trade

Burry emphasized that his Valero position is not a short-term trade driven by headlines. Instead, he views it as a long-duration investment tied to structural shifts in energy flows, refining economics, and geopolitics.

He also hinted at potentially increasing exposure through long-term equity anticipation securities, or LEAPs, which allow investors to express bullish views over multi-year time horizons.

As global energy markets recalibrate and Venezuela re-enters the conversation, Burry’s once-overlooked bet is emerging as a textbook example of how patience, specialization, and geopolitical insight can intersect in long-term investing.