Jordan Roach  

2026 is off to a very hot start. News anchors, newscasters, have plenty to talk to. Has not been a dull start, as we have intervention in Venezuela, we have political unrest in Iran. We have everybody talking about oil inflation’s back on the on the horizon. A lot to get into this week. I’m Jordan Roach, Chief Investment Officer, Retirement Planners of America and with me for this week’s episode. For the first time in studio. Yeah, Jeremy, what a pleasure.

Jeremy Thornton  

I know it’s great. It’s great to be here. New faces all the time, me and you together without Ken, intermediary between us.

Jordan Roach  

Yeah, quite a quite a difference. Yeah. I thought we’re going to, yeah, with Ken, usually here it’s dynamic we’re used to. I thought even maybe I’ll be shooting this myself, which is boring. I don’t want to be talking to a camera. So thanks for

Jeremy Thornton  

being here. I love it. I’m here for it. How was your How was your holidays?

Jordan Roach  

We had a nice holiday this week. We really did. We got a little half and half as many families do, yeah? Because, you know, we’re based in DFW, but my, my half of the family is in Houston, okay, yeah. So we did a little half and half, of course, but that’s an easy drive that’s didn’t have to step on a plane. We were able to leave no traffic. Almost on Christmas Day, made record time to North Houston. Wow, that’s surprising, yeah, yeah. Couldn’t believe it, either. Kids were easy. Oh, beautiful. You could not ask for a better one. Honestly, it was pretty good. Was yours? Just as quiet it was.

Jeremy Thornton  

It was nice and quiet. Had stayed local, all in DFW, so it was, couldn’t ask for more. I was at home in my own bed every night, so no complaints here.

Jordan Roach  

Nice, so nice and easy for both of us. Yes, indeed, right? And then we kick off the year, and news feed just blows up, quite literally, quite literally on the news feed. Yeah, I couldn’t believe it. And actually, before I even caught it is my family in Houston was blowing me up because my sister in law is Venezuelan.

Jeremy Thornton  

Oh, interesting, yep. So that’s a unique take.

Jordan Roach  

That’s right, she’s been, she’s been here for, you know, roughly a decade. Okay, her and her and her folks and some of her family. Some are still in Venezuela, some are out and about in Europe and everything else. But yes, I did not see it as fast as they saw because they were getting live feeds from their family in Venezuela. Oh, wow, which is pretty interesting.

Jeremy Thornton  

That is, that is very interesting. And then it just like, everything’s kind of unfolding as it’s coming. It’s like, hey, something’s going on, and then it just keeps unfolding, keeps

Jordan Roach  

going, right? We thought about coming on, you know, last week and talking about this, but every day it’s like, there’s gonna be more and more coming out, more to digest, right? So we wanted to sit and just let it marinate for a little bit.

Jeremy Thornton  

Yeah, absolutely. And it’s definitely, it’s a powerful thing that happened, and it’s kind of a surprise to a lot of people, no question. But my question is, why does Venezuela matter so surprising, the first one of the first times this has ever happened, like, those are all like, setting precedent, maybe, yeah, but why does it really matter?

Jordan Roach  

Well, so it’s interesting. So you’re right is this would be, you know, arguably the first, maybe the second time we have directly intervened, right in the capture, the arrest, the ousting of a leader, right that we know of the last time I was also before that was also in South America. Central America and Panama would probably be the last time I would say with Noriega that we’ve done something similar. But every other time you know us, typically exerts its influence with political and passive sanctions, right? We start rationing things back economically, physically, monetarily, but coming right back in, you know, to directly oust a leader, then say, Okay, now we’re going to influence things. You know, again, that’s, that’s something that probably caught a lot of people off guard,

Jeremy Thornton  

yeah, that, I imagine a lot of people, you know, because this wasn’t a war, this was, this was a an operation,

Jordan Roach  

yeah, and what we’re not going to go into, right? Is, well, is it an act of war and all that stuff, we’re not going to talk about that, right? But that’s right, is technically, it was not right. We’re not, we have not kicked off a war, right? We’re not about good or bad and all these, you know, people in the US, what they think about it, you know, because I’ve read certainly with you know us, splits in terms of who you talk to, even when South America, some of their leadership is split in terms of, this is good, this is bad. But we don’t want to go into that, yes, correct. We’re going to talk into just, why do we really care about Venezuela? Yeah.

Jeremy Thornton  

How does this affect financial planning, right? Like, what we do, it’s like, okay, well, how could Venezuela possibly affect, yeah, what we do here every day, right? Right?

Jordan Roach  

A country that I think a lot of people know of heard of issues there for a while, but it’s probably not on their radar, yeah, right, in terms of day to day stuff. So it’s really interesting thinking about Venezuela, you know, as a mighty oil producing country. Well, they’re not that. They maybe once were right. But the interesting about Venezuela is, they were a founding member of OPEC, by the way, interesting, they’re a founding member. And based on everything that we know, they have the largest proven oil reserves in the world.

Jeremy Thornton  

That is, that is very surprising to be have that larger reserve, and they’re not that major player right now.

Jordan Roach  

No, they’re not an economic powerhouse, right like the Saudis. They haven’t. Been able to figure out how to monetize that, but they do have, should be the largest proven oil reserves. You know, they’re in front of the Saudis. The Saudis would be number two. You know, Iran is behind that, Canada, Iraq, and even us, right? We’re all in there. And we all have different types of oil, because there’s light oil, there’s crude, there’s heavy crude, there’s also stuff in between, okay, but they have the largest Provenal reserves in the world, okay, right? But the idea here is couple differences, right? They’re not producing what the Saudis are, obviously, right? Saudis are known for, you know, for their wealth, quite frankly, because they’ve been able to put that online where Venezuela, if you look at them, despite, you know, they have, I think, 303 billion barrels of proven oil reserves. That’s a lot. That’s a lot a little country, a fairly little country, yeah, if you look at their production, right? Okay, great. You have this big oil field, or fields, what are you doing with with it? They’re down about 70% from their peaks that came, kind of the 1970s even kind of in Oh 607, when oil was hidden over 100 a barrel. Wow. So they’re down 70% Wow. And a larger a lot about it that came about when first Hugo Chavez took power in the late 90s, right? He started that at that point the country was pretty wealthy, yes, right? You know, Venezuelan late 90s, early 2000 pretty, pretty wealthy. And then we started seeing, you know, Chavez, at the time, move them to more of a nationalist, socialist driven regime, right? And so the interesting thing was, you know, they went and took things national, they confiscated, kind of, if you will, a lot of production, nationalizing the state run oil company, yeah. And since then, production has gone down from, let’s call it two to 3 million or billion. Three to 3 million barrels a day to they’re about 800 900,000

Jeremy Thornton  

Wow, a day. Okay, so you talk about compensation. Who was in Venezuela that was producing these record numbers, these super high, very wealthy. Who was there and where are they now?

Jordan Roach  

Yeah, so it’s interesting. So there’s only one player left. So, so back then, you know, the interesting about Venezuelan oil, quite frankly, is most of their oil is dominated by heavy crude. Okay, heavy crude requires a very precise refinement drilling project. It’s more cost and capital intensive, more label intensive, you need specific types of engineers and scientists to understand how to do it. So typically back then, what Venezuela had going for it is it basically imported a lot of that from the US, right? So we had dominant oil service companies like, you know, Schlumberger, like you had Valero, you had halberne down there, but then the producers, you had all of our majors basically down there, predominantly Conoco, Exxon and Chevron, okay. All had licenses to drill, operate, pull and move, move it. And then what you saw, really starting in the mid 2000s kind of 2005 to 2007 when they started nationalizing, is they didn’t technically kick Exxon and Conoco out, but they seized their refining and exploration operations, right? And so basically they had, you know, still into this day, are in legal battles, yeah, with Venezuela and international courts. So Conoco and Exxon gone, Chevron is still there under special agreement, okay, so they’re the only major down there

Jeremy Thornton  

producing anything. So they have their foot in the door. Essentially, they have their foot in the door.

Jordan Roach  

Yeah, you know, they kind of know the lay of the land, the governing opportunity. They know how to turn a profit, yes. And so, you know, obviously, Chevron is probably going to be interested in this. And then whether Exxon and Conoco want to rejoin the party, we’ll see,

Jeremy Thornton  

right, okay, yeah. So, so that’s, that’s, that’s a, that’s a good point to go into, is, okay, we have this regime change. What is kind of possible going forward? Is anything possible? Is there a timeline that we’re even looking at where, okay, hey, the production is back up. We’re back to refining. We’re back to all these kind of like, what is possible, essentially

Jordan Roach  

going forward. Well, I mean, okay, let’s say what is the ideal case. The ideal case is, what we know is they, at one point, have had the, they’ve had the ability to produce nearly 3 billion, right, barrels a day. So we do it, and they’re at 800 900,000 so right? You can probably three to 4x what they’re currently doing. You know, that’s possible, right? It’s there, right? That would bring them back in line, if they produce to that level. That would bring them behind the Saudis that produce 10 to 11, right? Million a day. It would bring you probably right in line with Iran. And so you’d go back into the kind of the top three producing countries if you get them there, ideally, right? Right now, the ideal side is what we’re talking about, right? Yes, correct. The other side is, and I think you know, Trump has probably not had all these conversations go the way he wanted to recently, is it’s going to require massive financial undertaking, massive investment by these companies, to get things up and running. Yeah, because you. You effectively have to wash out everything that currently exists, strip it out, including, there’s a lot of deals down there with Russian and Iranian interests and Chinese interests who are drilling an under license. How do you get them out and us in? Right? And for our, you know, oil and gas companies to feel like there is a clear governance structure, yes, right stability that’s going to allow them to consistently drill and turn this into, you know, a reasonable investment, and so, you know, reports all over the place, because this is just a hope. This is something you just don’t know, right? I think the first step, honestly, probably has to be is, you know, who the Venezuelan leadership structure, what that looks like, and the us and them are able to have meaningful discussions and get back into line where we can work together.

Jeremy Thornton  

Yeah, right. I imagine these, these drillers, and these Exxon and all the rest of them, don’t want to invest a whole lot of money and have it all seized over again.

Jordan Roach  

No, all seized over again, all chipped away, out or, or there’s some sort of subterfuge with kind of these, you know, other parties that we care about, like the Iranians and the Chinese we don’t want that. So Exxon has basically said, almost, it looks like it’s an investable based on current structure, yeah, Chevron, obviously, who’s kind of like, well, we have a leg up, yeah? So we think we can do this. I think most of the things that I’ve seen is maybe in a year, you can bring a couple $100,000 a barrel in production a day. Okay, so that’s a start, yeah, that’s, that’s a good start. That’s a start. But that’s probably a far cry from enough supply put on the market to meaningfully move prices or to give us enough control to where we feel like, you know, we have more control in the western hemisphere of our oil and gas situation, and we can kind of move away from, you know, some sort of worry about what OPEC and the East is going to

Jeremy Thornton  

do, yeah, yeah. And OPEC again, that’s the other major player here, with providing this crude oil worldwide. What are they’re looking at this and going, well, Oh, no. Like, is this another, you know, a founding member is coming back. Could they start producing again? They don’t want oil prices to drop to nothing. So what are they thinking?

Jordan Roach  

Yeah, I mean, you know, it’s interesting is, even before this happened, you know, you know, the clear intention, usually we look at the Saudis for like, what’s leadership going to look like, and they have already said they’re going to slow production, because right now, technically, you know, it’s always a supply demand equation, right? So you can bring a bunch of barrels online. But who is going to use those? Yes, and to use those you use oil, you know, for a lot of things, yes, but the issue they’re facing right now is already there’s more supply than meets demand. And so they’ve already said, if demand is waning and demand is waiting, because there’s probably global fears over geopolitical risk, inflationary risk, and so everybody is worried about consumers slowing down on consumption, which means you need less oil because you need less stuff, right? They’ve already said, signaled, at least they want to pull production back. Okay? So that’s always the counter is, even if you bring Venezuela on production as of right now, the current producing OPEC nations matter more, and that’s where you see the balance, like with Iran, right? You saw. So it’s very interesting. You watch prices Brent and W Tai. There’s two kind of primary sources to look at oil prices. At oil prices. When we go into Venezuela, you know, Maduro is out, you see prices pull down just steadily, yeah, and then Iran just has political protests and chaos, a lot of bad stuff going on there, and immediately that outstrips right? The supply considerations that Venezuela bring up is Iran’s current production matters more than in Venezuela’s near term. Yeah, and I think that’s, that’s the balance here between these forces. So it’s not going to take a lot to push oil back up. But I don’t imagine, you know, and I have, you know, a lot of friends being in Dallas and family in Houston that work in the oil and gas space. You know, most oil and gas companies are fairly profitable at 60 to 85 a barrel, okay, no. Goes above 85 at some point your demand side is going to get hit right, right? Because this cost of goods get more and consumers start doing less things. 50 is not real profitable, and Trump has signaled, well, I’d like to see it at 50. Yeah, right, which is really interesting. So look, OPEC is not going to go away from being able to try to control the supply side of the equation for now, right?

Jeremy Thornton  

Yeah. And obviously, you know, the US really wants a friendly neighbor down south that has this huge oil supply. Okay, so Venezuela has all this crude oil, and they’re sending it to somebody right now. Where are they currently, kind of sending it out to, yeah.

Jordan Roach  

So again, you know, they’re not sending out a ton relative capacity, yes. But right now, it’s Chinese interesting. The vast majority, okay, effect is going into China. And again, you look at national security interests. And of course, every action that’s done binary government is going to be some sort of national security interest, right? And that’s been a theme for, really, for the last 100 years, yes, but that’s one of the problems right now. The Venezuelan production that does exist is somewhat controlled and certainly exported to China, okay, that’s where they go to that’s a huge source of their oil, where the US. See, most of our election comes from Canada.

Jeremy Thornton  

Okay, yeah, yeah. Cuz, even, even before, you know, we went in and did this, we were seasoned oil tankers off their coasts because we had them, sanction is like, I mean, that had to have hit them. And it’s so surprising to me to learn that their production had dropped so much.

Jordan Roach  

Yep, yep, it’s, it’s, it’s, it’s fascinating, right? And that’s the thing is, is, again, because of they’ve, I think because they’ve nationalized and largely made it an uninvestable play for 20 years, you see their production go down. But the production they do have is largely going to be controlled by the Chinese, somewhat Russian, somewhat Iranians, and certainly exported to those same countries. And so, you know, we were trying to, we’ve sanctioned these, you know, Venezuela, for a very long time. And how do they get a rate away from it? Well, they are exporting some of it to our knowledge, and sometimes without our knowledge, because they’re, you know, masquerading and other type of vessels, and getting it to the countries who are in direct competition for us. Yes, for dominance.

Jeremy Thornton  

Quite frankly, yes. Okay, okay, so we know kind of where the oil is and what’s going on. What does what does that actually mean for audience? What does that mean for their wallet? What does that mean for oil to gas? Right? Because oil price is not gas price, but they are connected. There is a correlation.

Jordan Roach  

Yeah, it’s both. So it’s oil and gas and just oil to every all the petrochemicals, right? So, you know, I think it’s a push and pull right now, I don’t expect in the very short term, to have much effect. Okay? You know, again, if it’s if we go up from 58 a barrel for WTI to 6265 that’s not meaningful enough to matter. Now what could happen is you have positioning ranks, you know, ahead of any supply constraints that market thinks they’re going to deal with. Now what I think, what’s going to matter the most is it’s going to be the push, the push and the pull here, because, you know, President Trump, right now, in any administration, what a big mandate they’re trying to do is get, you know, costs, broad inflationary pressures, Down, Right? That’s any by any ways, right? And so I think President Trump looks at this and goes, Okay, a way we can get inflation down is we bring energy costs down. Bring oil costs down, yeah. And if we have more of a hand in global production, we have a more direct say right at the table, even though, because we’re not at OPEX direct say at the table of a founding member, and we can control some of that cost, which again, is one of the biggest inputs to the inflationary equation. And because, again, you’ve got two things, so you got oil prices. And why oil prices matter is because a couple things. One, yes, we use that oil to do a lot of things. Big thing would be produce fuel, right? Gas being one of them. And if you go historically, you know, you look in the move in oil prices, there’s typically a lag in gas by a little bit. But there’s, on the low end, I would say a 25% correlation. A high end, probably 80% kind of depends on the, you know, geopolitical environment, everything else, yeah, on average, I’d say 50 to 70% move. So that means, you know, in that correlation, it means it’s moving in the same direction of oil, and it’s almost not going to move one to one, but it’s pretty heavily with it, yes, right? So, if you have, you know, oil prices come down, and by getting Venezuelan production up and running, that’s more supply. Means old prices should come down. Yeah, it means gas over time should come down right, right? So that’s, that’s a good thing, yes. Now the other side is, you know, we take oil and we produce pretty much everything we know, I know is a byproduct of oil, yes, right? Plastics and asphalts, fertilizers. You know, if I pull my phone and this pen, we need oil to do those things, yes. And so on the consumption side. I think this is lowering that cost, and I think that’s going to be the big thing to watch. And I think that’s why President Trump is doing some of this stuff. Is because inflation has been as high as it’s ever been over the last kind of three years on average, at least going back to the, you know, 70s and early 80s. And so how do you get that down? What’s a difficult equation in terms of, you know, your monetary supply, and then you have kind of energy prices, right? And so if we can get, you know, if supply does come back online, that I do think inflationary pressures come down, right? Inflationary pressures come down, that also means probably the Fed will look at things go, well, it’s probably easier for me to lower rates, and then the cost of borrowing goes down. Yeah, that’s both sides right now. The other side is, like the geopolitical side, yes. So you get, you know, global conflicts again, going up, pushing up in Russia and Ukraine, and that extends into Europe. You get, you know, what’s going on in Iran spill over. Then everyone’s going to say, well, the current producers, not the future, like the current, can’t bring production online, yes. And then energy goes way higher, yes. And then inflation expectations go higher, yes. And then demand comes down, and then that’s a bad that’s a bad equation, right, right? So it’s a really fascinating push and pull. You know, for us, the way we look about this is, you know, we don’t want to move in advance of this, because we think this is a wild chess game that’s going to take a long time to play out, but we do think that we could get back into the cycle where. Prices are leading the inflationary cycle, which leads the economic cycle, yes, and we got to be ready for that, yes, for when it’s happened, not in front of that. Yeah. So a lot of probably volatility that we will continue to see. This is another variable that we didn’t really have in the last couple years, right? We had inflationary and tariff things and all these things. We had to consider what it means for portfolios. Right? We didn’t really have the commodity side, the oil side be part of it, right? So this is another dynamic to put into the equation, which is, again, something that we want to be prepared for if it does happen, but not moved in advance of it. Yeah, and a watchful eye. A watchful eye, right? Because we’re going to be ready to do something if it does happen as of right now. You know, again, markets have kind of looked past it a little bit, yep. And I think it does take a while to get into the markets, probably. So you know, that’s a good sign. The market didn’t seem to be too concerned, and it’s not going to be until it is perfect, right? Love it. So that’s all for today, folks. I hope you found this useful. Please like and subscribe and look forward to more.