When Michael Burry makes a move, investors pay attention. The man who famously predicted the 2008 housing crisis has been quietly holding a position since 2020 that suddenly looks prescient following this weekend’s dramatic events in Venezuela. In a Monday blog post on Substack, Burry revealed he’s owned Valero Energy for five years, describing himself as “more resolved to holding it even longer” after President Trump’s pledge to rebuild Venezuela’s oil sector.
Burry’s thesis is straightforward but powerful. Many Gulf Coast refineries were specifically designed to process Venezuelan heavy crude, meaning they’ve been operating with suboptimal feedstock for years due to sanctions and Venezuela’s production collapse. As Venezuelan oil flows return, these refineries should see improved margins across jet fuel, asphalt, and diesel. Valero shares surged nearly 10% on Monday, vindicating Burry’s patience. The refiner’s capability to efficiently process heavy, high-sulfur crude creates a natural moat that Burry clearly recognized back in 2020, long before this political inflection point.
But Burry isn’t just focused on the obvious large-cap play. He specifically mentioned that smaller refiners like PBF Energy and HF Sinclair could also benefit, even if Venezuelan oil returns only gradually. This acknowledgment of opportunity across the market cap spectrum is noteworthy and particularly relevant for small-cap investors looking beyond the headlines. While any meaningful recovery in Venezuelan exports will likely take years, Burry’s willingness to highlight mid-sized players suggests he sees value throughout the sector.
The investor’s analysis extends beyond refining. Venezuela’s oil infrastructure has suffered from decades of underinvestment, creating substantial demand for oilfield services companies if large-scale rehabilitation begins. Burry disclosed he owns Halliburton and sees potential upside for Schlumberger and Baker Hughes, companies that could be contracted to rebuild deteriorated pipelines and refineries. His comment about potentially buying more Halliburton shares or LEAPs—long-term options contracts—reveals his conviction level and provides a template for how investors might gain leveraged exposure while managing risk.
The timing of Burry’s revelation is significant. He’s held Valero since 2020, a period when Venezuela remained under heavy sanctions and most investors dismissed Venezuelan oil as a dead opportunity. This patience reflects his contrarian nature and willingness to endure extended periods where the market disagrees with his thesis. Wall Street analysts are now rushing to validate what Burry saw years ago, with multiple firms highlighting Valero as a top beneficiary of increased Venezuelan supply.
For small-cap investors, Burry’s framework offers valuable lessons. His mention of PBF Energy and HF Sinclair demonstrates that opportunities exist throughout the market cap structure for companies with the right capabilities. His focus on oilfield services points to second-order effects many investors overlook while fixated on the obvious refining story. And his use of LEAPs shows how options strategies can create leveraged exposure to multi-year themes.
Several key themes emerge from Burry’s playbook. He identified a structural advantage that created long-term value regardless of short-term volatility. He took a multi-year view, holding through uncertainty when the thesis wasn’t working. He’s thinking beyond the obvious, considering services companies and smaller refiners alongside his flagship position. And he’s using options to potentially leverage conviction while managing downside.
The Venezuela oil story is just beginning, and meaningful recovery will take years. But Burry has never been deterred by uncertainty—he’s built his fortune by being right when conventional wisdom said he was wrong. His five-year bet is now in the spotlight, and for those willing to think in multi-year timeframes and look beyond the headlines, his framework offers a roadmap for finding similar asymmetric opportunities.
