Senior Advisor and Commodities Strategist at Hartree Partners Ed Morse Talks Commodities

Summary

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Bloomberg Talks: Senior Advisor and Commodities Strategist at Hartree Partners Ed Morse Talks Commodities

Date: January 5, 2026
Host: Paul Sweeney & Nathan Hager (Bloomberg)
Guest: Dr. Edward Morse, Senior Advisor and Commodities Strategist, Hartree Partners

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Overview

This special Bloomberg episode features a comprehensive interview with Dr. Edward Morse, renowned commodities strategist, discussing the shifting global oil landscape, with a spotlight on recent dramatic changes in Venezuela, their geopolitical ripple effects, and implications for the energy market and US policy. The conversation threads together the fate of Venezuela’s oil sector, global power plays (with the US, China, and the Middle East), market risks, the evolving role of OPEC, and thoughts on “energy dominance” in the context of the Biden and Trump presidencies.

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Key Discussion Points & Insights

1. Venezuela’s Turbulent Oil Reawakening

• Long Road to Recovery

  • Morse emphasizes that Venezuela’s path to restoring its oil production is "very, very long," requiring not just technical fixes to the oil sector but fundamental political and institutional change.
  • He notes the necessity for a dramatic cultural and operational shift in the government to foster cooperation and attract investment.
  • Quote: "They can't do that and have the oil patch resume what it was like 25 years ago." — Morse [01:15]

• Enormous Investment and Risk Calculus

  • Oil companies will only invest if political and operational risks are well managed; initial forays (e.g., Chevron’s possible role) will be small and "trust-building."
  • Venezuela needs about $20 billion to merely increase output by 400,000–500,000 barrels a day.
  • Quote: "That's $20 billion. $20 billion is not nothing when oil companies have opportunities in...Guyana, Argentina, Brazil, and Africa." — Morse [02:09]

• Human Resources and Institutional Collapse

  • Venezuela’s petroleum sector lacks not just infrastructure but also experienced professionals who previously managed production.
  • Quote: "They don't have the human resources, they don't have the personnel to be able to guide it." — Morse [04:12]

2. US Strategy, Trump, and Transactional Diplomacy

• Transactional Approach and Energy Investment

  • Dr. Morse paints Trump’s relationship with financiers as good, but stresses that energy investment in Venezuela requires more than US policy assurances—it needs "reassurance from the Venezuelan side."
  • First steps will likely involve Chevron as a test case [03:31].

• Briefing the President

  • Morse proposes telling President Trump that energy dominance can’t be achieved without embracing renewable energy and hydrogen, due to increasing electricity demand and technological shifts (AI, cloud computing).
  • He highlights the US's fragmented energy landscape and criticizes the Jones Act for hampering internal energy trade.
  • Quote: “Your policy on energy dominance is a wonderful strategy. But...you can't do the electricity intensity you need for AI and cloud computing...without renewables...even without hydrogen. So you've got to enlarge what you think about energy dominance.” — Morse [10:52]

3. Geopolitics: China, OPEC, the Middle East

• China’s Venezuelan Gamble

  • China, as Venezuela’s main creditor, is in a bind: its Belt and Road investment is underperforming, and repayment now depends on tightly US-controlled Venezuelan oil exports.
  • China opts for quiet diplomacy; it publicly condemns the US, but Morse expects backchannel negotiations due to wider US-China stakes (e.g., tariffs).
  • Quote: “They had to do that. But they have to take a quiet approach because there's so much at stake between them and the US on a global basis.” — Morse [07:04]

• Showing the Flag in Taiwan & Military Posture

  • US military signaling happened ahead of Maduro’s displacement (major arms sale to Taiwan, naval presence in the region).
  • China is not positioned to escalate given the US military build-up and overlapping vulnerabilities.

• Saudi Arabia and OPEC+

  • Saudis respond quietly, see Venezuela as no immediate threat to OPEC+ cohesion, but the Middle East is focused on broader uncertainties (Russia-Ukraine, disruptions).
  • Saudi budget priorities and borrowing strategies may be impacted by the new oil price realities.
  • Morse forecasts testing Brent crude near $40/bbl, a level the Saudis can endure short term but perhaps not much lower.
  • Quote: “Testing Brent at 40 is something the Saudis can swallow. How much lower than that they can swallow, it is not known.” — Morse [10:21]

4. Market Structure & Energy Dominance

• Cautious Optimism Among Energy Companies

  • Companies see opportunity in Venezuela but are highly risk-averse given political instability; there will be no rush to invest until investment rules clarify.
  • Quote: “They see a better opportunity than they've seen in years, but they are apprehensive.” — Morse [13:08]

• US as Disruptor; OPEC’s Waning Relevance

  • OPEC+ is becoming less relevant as new players rise (Guyana, Brazil, Argentina) and the US surges as a “massive liquids producer.”
  • US growth is driven by natural gas liquids, which now compete with oil at the refinery level for a wide variety of end uses.
  • Quote: “We are the disruptor of the global market and we are the ones who put OPEC in a position of defense.” — Morse [14:03]

5. Latin American Political Dynamics

• Changing Political Tide
  • Morse views Latin America as rebelling against corruption across the political spectrum and entering a better era, in part due to tough lessons from Chinese over-lending and the necessity of repaying all credit.
  • Quote: “I think Latin America is in a very good position now, better position than it's been in a long time.” — Morse [16:35]

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Memorable Quotes & Moments (with Timestamps)

• On rebuilding Venezuela:
  "The timeline is very, very long...They can't do that and have the oil patch resume what it was like 25 years ago." — Morse [01:15]

• On investment risks:
  "Oil companies look at risk. They look at the risk in the marketplace...In the case of Venezuela, they need a lot of capital going into infrastructure." — Morse [02:09]

• On Chevron’s role and trust-building:
  "I suspect the first step will be with Chevron to see whether they can make good in short term input of capital with short term return." — Morse [03:31]

• On global market disruption:
  "We are the disruptor of the global market and we are the ones who put OPEC in a position of defense." — Morse [14:03]

• On US energy dominance:
  "You can't do the electricity intensity you need for AI and cloud computing...without renewables...even without hydrogen. So you've got to enlarge what you think about energy dominance." — Morse [10:52]

• On China’s Belt and Road setback:
  "They [China] have between 50 and 100 billion of debt. Their operations right now are to export oil to pay for that debt. The US controls their exports out of Venezuela." — Morse [07:04]

• On the romance of the oil age:
  "I don't know how we do that. I know that I'm not going to bring the romance back. And Dan Jurgen certainly has the ability to do it." — Morse [15:43]

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Timestamps for Key Segments

• Venezuela’s Recovery Timeline — [01:15]
• Capital Needs and Investment Risk — [02:09]
• Rebuilding Human Resources in Venezuela — [04:12]
• Changing Maduro: Political Shift — [05:45]
• China’s Position and Belt & Road — [07:04]
• US Military Posturing — [08:23]
• Saudi/OPEC+ Response & Oil Price Outlook — [09:12], [10:07]
• US Energy Policy & Fragmentation — [10:52]
• Energy Companies’ Reaction to Venezuela News — [13:08]
• OPEC’s Declining Relevance; US as the Disruptor — [14:03]
• Latin America’s Political Change — [16:35]

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Conclusion

Edward Morse’s interview offers a sobering yet nuanced look at the fate of Venezuelan oil, the calculated caution of global energy actors, and shifting geopolitical chess moves. He underscores the slow nature of institutional change, the complex interplay between domestic policy and international ambitions, and the fluidity of global energy markets increasingly shaped by non-OPEC actors and technological transition.

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For listeners seeking broad context on commodities and the politics underpinning global oil, this conversation with Ed Morse is essential, weaving hard analysis with historical perspective and policy recommendations.

Transcript

[Scarlet Fu / Karen Moscow]

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[Paul Sweeney / Nathan Hager]

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[Edward Morse]

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[Paul Sweeney / Nathan Hager]

The first name on the list was Edward Morse, absolutely definitive within the global zeitgeist, if you will, the Washington Consensus on Petroleum. All sorts of efforts here, including his work with the Council on Foreign Relations. And we're honored that Dr. Morris would join us in our studio today. Welcome to Bloomberg, Dr. Morris. When I, when I look at this, I think the arch question is a cup of coffee this morning with the President of the United States. How would you brief him on the timeline to get Venezuela to a new Caracas, a new Venezuela?

[Edward Morse]

The timeline is very, very long. The timeline includes not just what must be done on the oils patch, but also includes how do you get this government to cooperate with the United States? And yes, they're starting out on a good but this can't be done without a change in the entire view of the government of how they do what they do. They're there to make money, they're there to control things. And they can't do that and have the oil patch resume what it was like 25 years ago.

[Paul Sweeney / Nathan Hager]

This is a transactional president. You have lived with your iconic work at Citigroup, a transactional big American banks enjoying losing big money in Latin America and other places. What do you perceive as a relationship of President Trump with Mr. Dimon, with Mr. Moynihan and with other financiers of America?

[Edward Morse]

Well, he's got a good relationship with the financial sector for all kinds of good reasons that we can get into. That's a separate subject. But here the capital has to come from oil companies. And oil companies look at risk. They look at the risk in the marketplace. What is the supply, demand, balance? They look at the risks of an investment. And in the case of Venezuela, they need a lot of capital going into infrastructure. And that infrastructure has to be in place before the oil comes out of the ground. So we're talking here about billions of dollars to start to restore the infrastructure that will get things going to allow oil on a sustainable basis to rise by a mere 4 or 500,000 barrels a day. That's $20 billion. $20 billion is not nothing when oil companies have opportunities in, in Guyana, opportunities in Argentina, opportunities in Brazil and opportunities in Africa. So the question is, what will attract companies to spend the capital that Trump needs for the transaction toward Paul Chevron.

[Paul Sweeney / Nathan Hager]

Debt, 11.7% is where they are right now. Just as an example, what do you.

[Paul Sweeney]

Think the US Government or what do you think the, those energy companies would need from the US Government in terms of assurances or whatever to commit that capital, do you think?

[Edward Morse]

Well, they need the reassurance from the Venezuelan side as well as from the US Government because the US Government said it is not taking over Venezuela.

[Paul Sweeney]

Good point.

[Edward Morse]

So it needs, it needs to have the confidence which will be step by step and I suspect the first step will be with Chevron to see whether they can make good in short term input of capital with short term return. So I think it's going to be a slow process, but it will be trust building on trust and we'll see how smooth that transition goes.

[Paul Sweeney]

Talk to us. Just describe the energy when we talk about Venezuela. What do they have? What do they need? How big are they? How important is this? Because I understand there's a lot underground.

[Edward Morse]

It's quite important. So the world has known for a long time that Venezuela has the largest known oil reserves in the world. The problem is it's not the kind of oil that the rest of the world needs or wants. And the problem is it's in Venezuela and it's, it's complicated oil to get out of the ground, but they've done it before and they've managed to go from under 2 million barrels a day to 3 and a half billion million barrels a day in a relatively short period of time a couple of decades ago. So if the will is there and the government is there to provide the guarantees, but to do that you need the government institutions to be reborn. Those government institutions have themselves deteriorated dramatically. They don't have the human resources, they don't have the personnel to be able to guide it. So part of the process will be a return of that human resource base.

[Paul Sweeney / Nathan Hager]

Edward Morris with us for a lengthy conversation this morning with Hartree and of course definitive at Citigroup, among other services to the United States over his long decades on petroleum, on hydrocarbons. I believe I've shared the stage with you and Shannon O' Neill at the Council on Foreign Relations. Dr. O' Neill was on with us recently, exceptionally gloomy about Venezuela's ability to reorganize given an event like what we've seen, I assume you've been to caracas more than 40 times. You remember a Caracas from another time in place. Do you have any optimism that they can move from a Cuba like society to, to something that can get capitalism done?

[Edward Morse]

Well, you have to be a little bit optimistic given the change that has already taken place. So changing getting Maduro out of that position is a major step. And now the government is in a crisis of survival. That survival will require them to cooperate with the US So the options that they have are quite limited. Who is going to replace the US at this moment in time? Given the US military position, the naval position surrounding Venezuela, the control that the US has over Venezuelan exports, it's not easy to imagine a replacement for that. So the good news really is that they are cooperating to start and we'll see how that goes. But it will be a long road with difficulty.

[Paul Sweeney]

Is it your understanding, just based upon the limited reporting that we have in the last 48 hours that the government of Venezuela was in contact with the Trump administration to facilitate Mr. Maduro being taken?

[Edward Morse]

Look, it could not have been done without there being some contact within the government. We know from reporting that the intelligence operations preceded this. They were on the ground. They had to have help to be on the ground. And undoubtedly they were not taken by surprise because of the smooth way events went on over the weekend.

[Paul Sweeney]

How do you think China is viewing what's going on these days?

[Edward Morse]

China's in a big difficult position. They are a massive creditor to Venezuela. Venezuela has been part of central to the Belt and Road initiative in enlarging China's influence in Latin America. Excuse me. And it's been frankly a failure. They have between 50 and 100 billion of debt. Their operations right now are to export oil to pay for that debt. The US controls their exports out of Venezuela. So they, yes, they came down and condemned the US Government. They had to do that. But they have to take a quiet approach because there's so much at stake between them and the US on a global basis. So much at stake on a bilateral basis, including their tariffs, that they want to see some resolution on. So I think we'll see quiet diplomacy with China and the US Rather than stamping on the foot or saying anything about military force.

[Paul Sweeney / Nathan Hager]

In my reading, I've heard that. But what does Edward Morris. I'm going to butcher the pronunciation. Dr. Morris, do we need to show the flag this morning in Kaohsiung port in Taiwan? Does the US Navy need to get over There and you know, like Perry centuries ago, show the flag.

[Edward Morse]

Tom. I think the US Showed the flag before Maduro was taken out. They showed the flag with a massive military sale to Taiwan.

[Paul Sweeney / Nathan Hager]

Right.

[Edward Morse]

And, and the military has been there, the navy has been there. China is not in a position to fool around with the U.S. even with much of the U.S. naval fleet now around Venezuela. So I think it's going to be stepping, you know, very lightly on what could happen ever.

[Paul Sweeney / Nathan Hager]

Morris for this, folks, a special edition of Bloomberg Surveillance. We really held back the commercial interruptions to give you this conversation for America around the you have such a relationship with Faisal and on in Saudi Arabia. How does the Middle east in general and particularly Riyadh and Jeddah, how do they respond to these actions?

[Edward Morse]

They're responding quite quietly. Riyadh is looking at the global setting. They know that Venezuela could be a threat to the production agreement within, within OPEC plus, but not in the short run. In the short run, they're looking at the year ahead. The year ahead is quite uncertain and quite messy. And it was that way before the taking of Maduro. So we have Russia, Ukraine, we have uncertainty on the distortion and disruption side around the world. And the Saudis have also a military tie to the US that they don't want to lose.

[Paul Sweeney / Nathan Hager]

Right.

[Edward Morse]

So they have to and they, they, they look at their budget. The budget requires a lot of borrowing. That borrowing may include in their own minds how low can prices go for us?

[Paul Sweeney / Nathan Hager]

Where's the folks? I failed, Paul. I, I failed at Morris. Nailed the decline in oil. Do you have a lower oil target from here for Hartree?

[Edward Morse]

So we don't know how low the price will go. It's lifted a little bit by the geopolitical risk. I'd say the supply demand balance, which is higher supply than demand now and going forward is for oil testing Brent at 40.

[Paul Sweeney / Nathan Hager]

Okay.

[Edward Morse]

And I think testing Brent at 40 is something the Saudis can swallow. How much lower than that they can swallow, it is not known.

[Paul Sweeney / Nathan Hager]

I want to get this thing because Paul's got eight questions. So you're going to go visit Trump. President Trump is going to be in Edward Morris coffee with the president. You're going to talk about a transactional American president. And I know you're going to get a phone call from Ottawa where Mark Carney is going to go. Edmonton's playing Ottawa. Ed Morris, come join me at Ottawa Senators hockey game. I mean, this is the way it's going to work. What do you say to Mark Carney of Canada?

[Edward Morse]

Well, start With Trump, Because I haven't answered your question. I say to Trump. And what I say to Trump is your policy on energy dominance is a wonderful strategy. But, Mr. President, I think you're ignoring some things about energy dominance, and there are two things about it. One is that you can't get to where you want without having a significant growth, because this is a world transitioning to electricity intensity. And you can't do the electricity intensity you need for AI and cloud computing and energy dominance without renewables. You can't do it even without hydrogen. So you've got to enlarge what you think about energy dominance. And then, Mr. President, you've got to think about the U.S. the U.S. is not one country when it comes to Energy. It's six. We have two exporting segments in the U.S. they are the Gulf coast of the U.S. and I'm not talking about the Gulf of America or the Gulf of Mexico, but the Gulf coast. And we have Alaska, both exporters of fossil fuels. And then we have two massive importers of fossil fuel with no tie. And Mr. President, here is the lesson. The reason that we have two importers on the west coast and the east coast that are massive in scale, global in scale, is because another period of dominance, around World War I, we thought we were the best shipbuilding company country in the world, and we wanted to retain that dominance. So the Jones act was enacted. And the Jones act has meant that when it comes to energy, we are importers because we can't afford American ships to take oil from the Gulf coast to the west coast or the East Coast. We need foreign vessels, and they carry foreign.

[Paul Sweeney / Nathan Hager]

So this is the moment to do away with the Jones Act.

[Edward Morse]

This is the moment to do away with the photograph and also to tell the president, energy dominance, a good idea, needs a little bit of massaging at the edges.

[Paul Sweeney / Nathan Hager]

I mean, the photograph of Theodore Roosevelt with a map of Venezuela behind him from, I believe, Paul 1909 was just stunning. I mean, this history going back, you're Paul Sweeney with Edward Morse.

[Paul Sweeney]

So when you go down to Houston, you talk to these big energy companies today, are they happy with what's going on in the last 24, 48 hours? Are they apprehensive? Did they see a big opportunity here?

[Edward Morse]

They see a better opportunity than they've seen in years, but they are apprehensive. The risk of putting capital, their capital, their shareholders, capital at risk looms extremely large in their minds. So there's not going to be a rush to put money into Venezuela until we see what the Structure of the investment might look like.

[Paul Sweeney]

I'm surprised. I don't see a move in WTI and Brent crude today. Now, I couldn't have told you, is going to be up 5% or down 5%, but kind of got nothing going on here today.

[Edward Morse]

Well, in my prepared remarks, I thought that was the first question. I didn't know, you know, that we were going to have prices go down a little bit.

[Paul Sweeney / Nathan Hager]

Surveillance, you know, we make it up.

[Paul Sweeney]

As we're winging it.

[Edward Morse]

No, I'm not surprised.

[Paul Sweeney]

Okay.

[Edward Morse]

There is no change in the energy market, period.

[Paul Sweeney]

There you go. All right, so. But I think at some point it just feels like almost OPEC and OPEC become less and less relevant every day.

[Edward Morse]

OPEC and OPEC have become less relevant every day since the beginning of this decade. And when we look at the positions that have put this in place, it's not just the rise of Guyana and Brazil and Argentina again, but it really is the U.S. the U.S. you know, I have this battle with my colleagues at work almost every day. The US Is not just a crude oil producer. It is a massive liquids producer. We are a producer of 23, 24 million barrels a day. And our growth has been in natural gas liquids. Natural gas liquids compete with oil out of a refinery. They compete with gasoline, they compete with distillate, they compete with fuel oil. They're there for transportation, they're there for home heating and power generation and industrial use. So we, we are the disruptor of the global market and we are the ones who put OPEC in a position of defense.

[Paul Sweeney / Nathan Hager]

I would be. We're going to have to wrap it up here with Mark Champion. Coming up, folks from Europe with all of his decades of experience. Dr. Morris, some of the highlights of my, my career here had been with you and with Daniel Jurgen. If I was to get Jurgen and Morse together and look at his. The prize, just the romance that I as a kid in college read cover to cover. We got to find the romance for Venezuela to save a society, to save a region, maybe to support the Dunro Doctrine. I don't know. How do we get the romance back that you knew working there that I knew as a student?

[Edward Morse]

I don't know how we do that. I know that I'm not going to bring the romance back. And Dan Jurgen certainly has the ability to do it. By the way, I was an early reader of the Prize. He and I knew each other in graduate school. We were in different graduate schools. And when he wrote the Prize, the original version that I read was Actually twice as long as the version in print. So he had to cut out a lot of wonderful text in order to put out that brilliant book.

[Paul Sweeney / Nathan Hager]

The book was Paul. It was. You had to walk. Even if you didn't read it, you walked around with it.

[Edward Morse]

Yeah.

[Paul Sweeney / Nathan Hager]

To be cool. Jurgen talked about this unique American relationship with various and sundry banana republics, Reagan and Granada and the rest. Can we develop a new process with Central and Latin America, or will this be the same old, same old through the rest of the Trump term?

[Edward Morse]

No, I think. I think there is a process going on. If we look at elections that have taken place in Latin America, there's a rebellion in those countries against corruption. There's a move from the corrupt left to the right. We've had a corrupt right in the past, but it's been a very constructive set of moves from reelection. So I think. I think Latin America is in a very good position now, better position than it's been in a long time. And part of it is the lessons learned from China overspending and having a view that all credit has to be repaid.

[Paul Sweeney]

Wow.

[Paul Sweeney / Nathan Hager]

Paul, we got to get to mark champion. But Dr. Morris, I got to bring this up. Paul said, you got to ask the question, Tom, what's it mean for Landman?

[Edward Morse]

Thank you very much for inviting me. It's been a pleasure to be.

[Paul Sweeney / Nathan Hager]

Thank you so much, much. With Hartree and of course, Dr. Morris of Citigroup for many years. Edward Morse there.

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