Fatal Strike: Mercenary Road of Gunfire Ranger Chapter 858 - 802: Black Market Trade

Blood Fox is paying close attention to Mountain Eagle's plan to purchase Venezuelan crude oil...

A man nad Ricardo, a descendant of Arctic Fox, lives in the capital Caracas. Due to receiving money annually, while he was only middle class when Venezuela was prosperous, now he firmly belongs to the affluent class there.

Coincidentally, this guy also runs an import-export business, though not in the traditional sense, but rather smuggling.

His route runs from Caracas to Barranquilla, in northern Colombia.

Ricardo is not familiar with the energy business, but he has contacts with people in energy companies within his social circle.

Blood Fox did not initially urge Ricardo, but once Mountain Eagle explained a clear profit model, he decisively made a call to Ricardo.

The old guy turned on the speakerphone and, in sowhat awkward Spanish, engaged in a conversation with Ricardo, during which Mountain Eagle noticed that Ricardo was very enthusiastic and highly respectful towards Blood Fox.

It's been a while since Mountain Eagle used his Spanish, so while his reading and writing might be rusty, his listening and speaking are still okay.

Quickly, Mountain Eagle caught a few key words from their conversation: 'black market,' 'Colombia,' 'Guyana,' '150,000 barrels'...

After a swift exchange with Ricardo, Blood Fox hung up the phone and said to Mountain Eagle: "I don't know how you plan to purchase crude oil from Venezuela. If it's through the Venezuelan National Petroleum Company, the purchase price likely won't be much lower than market price; however, if it's through the black market, it's a different story..."

Mountain Eagle understood this...

He had researched so information; Venezuela has been significantly troubled by the United States in recent years. Due to issues with crude oil sales, crude oil production has decreased by nearly 70%, and due to the cost associated with extracting heavy crude oil, life there has beco quite dire in the past few years.

Now their crude oil output is only about 2.6 million barrels per day, but their daily sales are less than 2.1 million barrels.

Currently, three international companies are assisting Venezuela in selling crude oil: the first is a Russian company, Rosneft, which bypasses sanctions via invoice transfers to sell crude oil to the United States.

The second is the Spanish company Repsol, which has partnered with the Venezuelan National Petroleum Company to establish an energy company, helping them to extract oil and guaranteeing an annual import of 3 million barrels of crude oil.

The third is CNPC from East, which not only consus a portion of Venezuela's crude oil exports but has also acquired 40% of the largest oil field in Venezuela, Huining 4 Block, and is assisting them in updating equipnt.

Currently, it produces 100,000 barrels of crude oil daily, with the potential to reach a standard of 250,000 barrels per day in the future, and all produced crude oil will be supplied to the East market.

However, these three companies cannot sustain Venezuela's entire market. As exports shrink and the signing of the Minsk Agreent, coupled with OPEC's announcent to increase production, the oil price began to noticeably fall in 2016, currently hovering around 50 dollars, with potential to drop further.

At this point, Venezuela is in quite a desperate situation...

Oil extraction is not like drilling a pressure well on the ground that can be stopped at will; whether to increase or decrease production, it's quite troubleso.

Every day, the 2.6 million barrels cannot be further reduced. If they continue to shut down equipnt, not only will the Venezuelan Governnt itself not withstand the pressure, but restarting the equipnt in the future will require enormous funding.

Mountain Eagle just heard that now Ricardo has gathered information: Venezuela now has 150,000 barrels of crude oil flowing through the black market to Colombia and Guyana daily, but there are still more than 300,000 barrels of crude oil that need to be sold.

Ricardo can be considered a part of Venezuela's affluent class, and his father-in-law works at the National Petroleum Company, and though he's just an ordinary employee, he has no problem assisting in contacting people who can make decisions.

Currently, Venezuela is eager to sell off the excess crude oil. Compared to crude oil sold through regular channels, those sold through the black market only cost 15 dollars per barrel, although 1 dollar per barrel needs to be taken as a service fee afterwards.

Moreover, there's room for this price to drop further!

While the breakeven line for Venezuela's crude oil exports, due to additional governnt public service funds and company managent costs, reached an exaggerated 85 dollars approximately...

But in reality, their crude oil extraction cost is about 35 dollars per barrel, and total cost, which includes taxes and depreciation fees, cos to around 45 dollars per barrel.

Since it involves the black market, certainly through so shady ans, demanding 15 dollars per barrel can only be considered reasonable, yet it still hasn't reached Mountain Eagle's ideal price.

Because the unsold crude oil, just lying there, will continue to push up the costs for the Venezuelan National Petroleum Company, and for those daring to engage in black market crude oil trading, that crude oil basically incurs no cost.

Selling it out is crucial!

Even if Mountain Eagle wanted to bypass sanctions through xico as an interdiary, it would still carry a cost.

xican oil is also state-owned, and the control of xican crude oil exports to the United States is highly concentrated in Pex Company.

Because they enjoy zero-tariff treatnt, while other companies mining oil need to pay 3% tax to bypass regulations if they want to export to the United States, which those private energy companies do not oppose.

And Mountain Eagle does not wish to totally rely on black market transactions to transport crude oil to the United States, because it's very troubleso and completely inconsistent with the style of the Shadow Fleet.

The so-called 'black market trade' Ricardo ntioned on the phone is actually sending crude oil via small boats to Central Arican countries that cannot self-sustain fuel, selling to those small refineries, often referred to as black factories, which refine the crude into products sold at prices 20-30% lower than market prices.

xico's famous gang Los Zetas initially rose by reselling black market crude oil, however, in the beginning, they would steal oil by tapping into oil pipelines and then sell the crude oil to small refineries in the United States using vehicles or small boats.

Later on, it developed to the point where he not only stole it himself, but also bought stolen crude oil at low prices from others, then used his smuggling routes to transport it to the United States.

Since it's a business with no capital, it's all a huge profit no matter how you do it!

There's a saying that goes, living by the mountain if you depend on it, living by the water if you depend on it. This kind of thing is not rare, not just in xico, but also in the early years of East.

However, in Mountain Eagle's view, these gang thods aren't particularly applicable to him...

Because he's focusing on volu, not smuggling in an ant-moving style. A 20,000-ton oil tanker is his ideal minimum standard.

A 20,000-ton oil tanker can load 150,000 barrels of crude oil. At 15 dollars per barrel, the cost of one shipload is 2.25 million dollars. With transportation fees at about 6 dollars per barrel, the total cost cos to around 3.15 million.

When you sell black market oil, you need to be at least one-third cheaper than market price to sell it off.

According to current international crude oil prices, which are about 45-50 dollars, Mountain Eagle's profit per barrel of crude oil is only 15-20 dollars.

The best approach is actually to find an energy company in xico to collaborate with, share the revenue, use their credentials to pay taxes, and then change the origin of the crude oil on the tanker, sending Venezuelan crude oil directly to the United States, or simply rge the crude oil into Pex Company's pipelines and have them sell it.

Or there's an easier way, which is to have Anna help register an energy company in Russia, and, just like with Rosneft, go through official channels by transferring invoices.

It's essentially about changing the attributes of Venezuelan crude oil through the qualifications of Russia's energy companies to help so countries within the United States' sphere of influence dodge regulation and import Venezuelan crude oil.

Only companies from Russia dare to do this so openly...

But with current international oil prices, unless there's a massive volu, it's hard to profit this way.

If the national oil price were 80 dollars a barrel, Mountain Eagle would undoubtedly choose to do it this way, but right now it's unrealistic.

His best option is to transfer through xico...

Theoretically, as long as it can be sold, no energy company will mind having too much crude oil produced from its wells every day!

But these all co with costs. A foreigner approaching blindly won't get anyone's attention at all.

Therefore, once Blood Fox confird that purchasing crude oil from Venezuela was feasible, Tiago beca important!

A big boss in xico might not be able to engage with Pex Company's higher-ups, but persuading the bosses of so small energy exploration companies to make money together shouldn't be too hard.

The xican Governnt faced bottlenecks in oil exploration due to funding and managent problems, so in 2013, they opened up private oil exploration licensing, and many energy companies joined the industry.

However, the high extraction costs, volatile international oil prices, and Pex Company's export monopoly have made life tough for these small companies.

As long as you can alleviate so of their concerns, you can persuade them to help complete transshipnt trade of crude oil; after all, it's profitable for everyone.

Once the path is cleared, you can later switch to 150,000-ton or even 300,000-ton tankers to win through volu...

The distance from Venezuela to Houston in the United States is less than 2,000 nautical miles. Once the path is cleared, transport costs can be significantly reduced.

Blood Fox watched as Mountain Eagle was lost in thought. The old guy didn't quite understand why Mountain Eagle was so fixated on such an uncontrollable business, but he had one rit: he respected Mountain Eagle's career choices...

While Mountain Eagle stayed silent, Blood Fox headed to the bar, grabbed a bottle of vodka, poured it for everyone, and enjoyed the snacks Xiao Wan brought, such as dried fruits and peanuts.

By the ti Mountain Eagle snapped out of it, a bottle of vodka had already been finished by the four old n...

After downing a 1500ml bottle of vodka, 'Eagle Claw' was barely holding up. With sleep in his eyes and a flushed old face, he complained to Blood Fox...

"I'm here all for my daughter's happiness. I've had a dull life, lost my wife early, didn't raise my daughter well. Now I'm just counting on Lilith to work with a good boss, and hopefully find a good husband soday..."

Sharing the sa woes, 'Cal' sighed and nodded, saying, "It's the sa for . I feel sad whenever I see Tiffany. This kid's gone astray; she doesn't listen even when I tell her..."

Mountain Eagle blinked, looking at the old n who were clearly in mockery. He spread his hands and said, "Let's solve my imdiate problem first...

If things go smoothly, by June this year, I'll organize a company retreat in El Salvador. I'll bring people from the Singapore Financial Office...

Then you two pick. As long as you fancy them, I'll knock them out and send them to Tiffany and Lilith's rooms."

'Eagle Claw' was startled for a mont, then firmly nodded and said, "It's a deal. No need to knock anyone out; I still have so savings. We'll dress Lilith up, and there'll surely be a few with an eye for her..."

As 'Eagle Claw' thoroughly wiped his sleep again, he slurred a bit and asked, "What do you want?

I don't get the oil-selling business, but I'm a pro at surgery and fighting!"