On Dec. 11, Sky’s data and economics editor Ed Conway explained The real reason Venezuela matters. “And there’s one big reason why America is so interested.” It was almost a premonitory analysis. Of course, it was never about drugs! Not with the former president of Honduras and other drug kingpins being pardoned by the very same Trump!

There is also an accompanying article, The real reason for Donald Trump’s Venezuela exploits, but this time I prefer the video. With stills from the 6m55s video.

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Now, Donald Trump is insisting that the main reason he’s interested in Venezuela, the main reason the US is kind of looking at tankers off the coast of Venezuela, comes back to drugs, the trade, the smuggling of illegal drugs out of Venezuela. But what if it’s not just that? Maybe there’s something else going on. What if it’s partly about oil?

Now, on the surface, you might be thinking, “Why does America even need Venezuelan oil?” Then I can kind of understand your point, because if you look at just total oil production, look, this is up until 2005, the US was there, Venezuela was there, Saudi Arabia was there.

But, as you probably know, since then everything has changed. Look, American output has gone through the roof, way above Saudi Arabia, and Venezuela has gone basically to the floor. And that’s kind of post-Chavez, Maduro, they’re one of the minnows now, I think, 21st biggest producer in the world.

So, again, that question: why should America care?

Well, in the US, that big rise is largely down to this. It’s down to the Shell Revolution. So, you’ve got fracking all around the US, producing extraordinary amounts of crude oil.

And here’s where we get to the interesting bit, because when you’re thinking about crude oil, maybe you’re just thinking about, well, look, barrels of oil, it’s all the same, isn’t it? Well, actually, no.

So, if you kind of look at crude oil, there are various different types of crude in different parts of the world. There are actually kind of various different ways you can categorize it. But one way you can look at it is to look at the kind of density. So you’re basically looking at how thick that crude is. And when I say thick, I mean literally how thick. This is showing you global production broken down by the density of that oil.

And so you’ve got the kind of medium stuff. And this is probably if you’re thinking if you’ve got a kind of image in your mind of what crude oil looks like, it’s a bit like this. You know, it’s kind of black, but it’s not too viscous. It flows around.

But there’s other stuff as well. So this is light crude, and it kind of almost looks like a smoothie, doesn’t it? And that’s the same stuff. This is still crude oil, but due to the kind of geological and biological conditions in the ground when it was being formed, you know, hundreds of millions of years ago, it comes out looking a bit different. And so that’s light.

You’ve also got heavy stuff. And it’s kind of relatively small in global production, but this is gloppy, super viscous stuff. Heavy oil.

So heavy, medium, light. Remember that.

And remember also: the key thing here is, you get it out of the ground, it may look like that, but ultimately you still need it to go into, you know, someone’s car, or indeed, you know, be turned into chemicals. Basically, you need to process it. And that processing happens in places like this: in refineries. And there are refineries all over the world. Of course, there are refineries all over the US as well. There’s kind of more than a hundred of them.

And if we kind of look at where those refineries are, well, there are some in California. So the history in America, actually, historically, a lot of the early Californian oil, that was the heavy, gloppy stuff.

And if you look at some of the refineries in America, here are some of the refineries. There’s one in LA there. These are the 10 biggest. You’ve got some up here, around kind of towards Canada, that we’ll kind of come to that in a second. But a lot of them are down there in Texas, Louisiana, on the coast. And here’s the critical thing.

These refineries are primarily set up for heavy oil, for taking that gloppy stuff and turning it into gasoline and all of the other different products.

But here’s where things get interesting. And remember that chart I showed you a moment ago, the one which showed kind of Shell oil and how it kind of went through the roof.

The oil that’s generally produced with Shell oil, the fracking oil that comes out of the ground mostly in the light form. So it’s the smoothie. It’s sometimes actually even clear, it comes out of the ground clear rather than black. And that’s the majority of American production right now. Shell oil tends to be light stuff.

And actually that’s kind of going back 10 years. Look at where we are now. Look at those bars.

In the last few years, the amount of light oil being produced in the US has gone up and up and up, and the amount of heavy stuff has gone down.

But back to those refineries, they need to be fed. If America is going to have gasoline, it needs to feed those refineries with heavy oil.

So if you look at the kind of imports coming into America in recent years, even though America is producing so much oil, more oil than it ever produced before, it still needs to suck in loads of oil from overseas. And the type of oil we’re talking about, it used to be, it’s mostly heavy crude.

It used to be only 12%. So only 12% of imports were heavy, gloppy crude.

Now it’s about 70%.

So 70% of the oil coming into America, which it needs to basically keep its economy going, is heavy crude. And where does heavy crude come from? Well, here are some of the big countries where you find most of it.

It’s Canada and Venezuela. There’s one other I’ll come to in a second, but it’s Canada and Venezuela where you get most of this heavy crude oil.

Which is why we’re about to think about where those refineries are. They’re mostly set up — kind of, you’ve got some in the north there, to get the heavy oil coming out of Canada, and you’ve got some around the kind of Louisiana and elsewhere, and Texas — to get that heavy oil that comes in from Venezuela.

That was kind of the way they were set up. And it’s really expensive to rebuild these things. You can’t just chuck out a refinery very easily overnight. Some came from Mexico, in the Gulf of Mexico, as well, and that was pretty heavy too. So that’s the picture in America.

And the upshot is, even though America is producing more and more oil, the imports — this is showing you imports of oil into America — are still really high.

And if you break down those imports by the country that stuff is coming from, well, there’s Venezuela, and it used to be a decent slug, actually more coming from Venezuela just about than from Canada, just at the turn of the millennium.

But now look at what’s happened since. Right now, Canada has gone from 15% of all of the US imports of oil to 61%. 61%, and Venezuela is basically next to nothing.

But here’s what’s tantalizing, and here’s the reason I think that a lot of people are looking towards Venezuela and thinking, “Well, there’s more to this than just drugs.”

Look at total oil reserves around the world. The higher these bars are, the more oil there is in the ground. So that hasn’t yet been taken out of the ground.

So they’ve got Saudi, Iran, Iraq, all of the usual suspects. But the biggest of all, and this is according to various different sources, the biggest of all is Venezuela.

And what’s that oil? It’s the heavy, tarry stuff that you might well want to put into those American refineries.

And there is really only one other place in the world that has a kind of serious amount of heavy oil other than Canada and Venezuela. And lo and behold, guess where that is? It’s Russia.

All of which is to say, you know, it matters what kind of oil America needs.

It’s worth just delving into these kinds of nuances because that helps you understand a little bit more about the backstory of geopolitics.