Trump's very fine Venezuelan adventure has certainly thrown a monkey wrench into some countries' plans and opened the doors to some possibly really good things down the line in others. Every last bit of it, in one way or another, all links back to that most precious of Venezuelan commodities, their oil, as nasty, heavy, and sour as it is.
It has been the country's lifeblood forever, and if they play their cards right, will continue to be, only with renewed, abundant returns for the country and its people, versus enriching only a despotic regime and its toadies.
In the United States, the recent deal President Trump announced concerning a revived flow of Venezuelan crude heading towards our Gulf Coast has American refiners licking their proverbial chops.
The arrival of 50M bbl of Venezuelan heavy could be the beginning of a renaissance of Gulf Coast specialty refiners who have been in a moribund slump in the past few years for lack of enough specific crude to keep their refineries operating efficiently.
...The first barrels of thick, tar-like crude could arrive as soon as next week at ports across Texas, Louisiana and Mississippi, where dense clusters of refineries are built and bred to process heavy oil.
The development follows President Donald Trump’s Tuesday evening announcement that Caracas will transfer up to 50 million barrels of oil to the U.S., worth about $2.8 billion at current market prices.
..."The Gulf Coast concentrates most of our refining capacity, and those refineries were built or revamped over the years to process extra-heavy crude similar to what is produced in Venezuela," explained Jaime Brito, executive director of refining and oil products at OPIS.
"From a market perspective, additional volumes of extra-heavy crude entering the U.S. refining system would be an extraordinarily positive development," Brito said. "It would allow refiners to operate more efficiently, something they haven’t been able to do for years and could help keep gasoline and diesel prices at better levels because refiners would have access to cheaper crude and more optimal operations."
Being able to run constantly without supply interruptions means 'less expensive' to maintain and operate, which translates down the line to better gasoline and diesel prices on the consumer end.
...Because Gulf Coast refineries supply a large share of the nation’s fuel, shifts in how efficiently they operate can ultimately ripple through to prices paid by U.S. consumers.
There's also a benefit on the national pride side, as a reopened Venezuelan oil market will compete directly with Canadian output. And again, competition breeds savings in most instances.
...A renewed flow of Venezuelan barrels could also intensify competition in the heavy-crude market, particularly between Venezuela and Canada, Brito said.
"You’re going to have fierce competition between Canada and Venezuela, which benefits American refiners and gives them more flexibility to potentially lower fuel prices," he said, adding that he was speaking strictly from an oil-market perspective.
Bloomberg is saying that the prospect of tens of millions of barrels of Venezuelan oil headed to the US is already affecting pricing to the negative side.
...“The prospect of a sale of 30-50 million barrels of Venezuelan crude is a near-term headwind to pricing,” RBC Capital Markets LLC analysts including Brian Leisen and Helima Croft said.
Interestingly enough, a by-product of the refining process, high sulfur fuel oil (HSFO) that powers ships and electrical power plants, is also turning in America's direction, thanks to the Venezuelan operation and subsequent oil agreement. That fuel is now becoming more expensive in Asia than in the West.
...A left-over from the refining process, high-sulfur fuel oil is used to power ships and as a feedstock for electricity generation. In recent days, the East-West spread for this product — the difference in prices between Rotterdam and Singapore — has blown out, hitting the widest since May. That’s likely in response to the prospect of Venezuelan barrels being redirected to western markets and away from Asian customers like China.
“In Rotterdam, HSFO has become relatively cheaper than Brent, while in Singapore it has become relatively more expensive,” said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management. “This simply reflects that now the oil is ‘American.’”
Speaking of Asia, the negative effects on China, some of which I spoke about in my earlier piece, are becoming even clearer, as are the moves the Chinese are making to cope at the moment.
According to reports, the Chinese haven't officially received any Venezuelan oil since this past March. What they do have, however, is a stockpile on oil tankers offshore of some 82M barrels or so, just floating out there until they need it. China as a whole consumes 16-16.6M bbls of oil daily, so that gives them a bit of a cushion in addition to whatever other fossil fuel imports they acquire, mainly Canada or Iran, and then add in the notorious shadow fleet deliveries.
Those are really a labyrinthine delivery affair, requiring the crude to spend months at sea and be swapped from ghost fleet tanker to ghost fleet tanker before ever making it to its destination.
...Official data suggests China hasn’t received any shipments of Venezuelan oil since March 2025. However, third-party and ship-tracking data indicate flows to the Asian nation remained robust last year, even increasing in the second half, despite US sanctions.
Venezuelan crude takes an unconventional route to reach buyers in China. Transport typically takes more than two months and involves multiple ship-to-ship transfers to mask the origin of the cargoes.
At the moment, the cash-strapped Chinese are eschewing Venezuelan crude as too expensive. Where it's usually been sold at a discount due to sanctions, now there has been an extra few-dollar cost increase due to the US action and embargo, coupled with those interdiction delivery uncertainties. The Chinese feel they have enough of a cushion that they can purchase elsewhere, even if that option is more expensive at the moment.
Chinese buyers shunned offers for Venezuelan crude this week, as a US blockade on the South American producer constrains exports and pushes up prices.
Venezuela’s Merey crude was offered at a discount of $13 a barrel to ICE Brent, said people familiar with the matter, who asked not to be identified because the information is not public. That compares with a discount of as much as $15 a month ago, prior to the US campaign on sanctioned tankers.
Loadings of Venezuelan oil destined for China tumbled last month as the naval blockade ramped up, according to data compiled by Bloomberg. Sellers have hiked Merey offers due to the shipping disruptions, the people said.
Bloomberg explains that the Venezuelan Merey is often used in asphalt production for road construction, and with the Chinese slowdown in their economy rippling into construction, that has aided them in reducing overall oil consumption.
China's oil-backed loans to Venezuela at one time were as high as $60B, but have been mostly repaid, with what analysts calculate is an outstanding balance of around $12B still on the books. The amount is still large enough that Beijing ordered an immediate audit of all loans to the Venezuelan regime in order to judge what exposure each of their individual banks had.
...The directive underscores growing concerns about potential shocks to China’s banking sector as geopolitical risks intensify.
China is ordering its banks to review billions in Venezuela-linked loans after Washington's capture of Nicolás Maduro, reflecting rising concerns over geopolitical shocks to lenders. pic.twitter.com/18clOs0Q9u
— China in Focus - NTD (@ChinaInFocusNTD) January 6, 2026
It's a monkey wrench in Chinese plans, for sure.
Tomorrow, President Trump is set to meet with oil industry leaders in the first step of his Venezuelan turnaround plan.
Trump Venezuela Meeting Is Shaping as Who’s Who of US Oil
More than a dozen oil executives — including veteran wildcatter Harold Hamm — are slated to meet with President Donald Trump and top officials at the White House Friday, as the administration pushes them to rebuild Venezuela’s battered energy sector.
The scheduled lineup is a Who’s Who of American oil titans, with representatives from Chevron Corp., Exxon Mobil Corp., ConocoPhillips and other companies responding to Trump’s call to discuss potentially reviving Venezuela’s production, which has plummeted amid years of disrepair, fading investment and the exodus of Western companies.
The executives attending were described by people familiar with the matter who asked not to be named because the discussions are private. Spain’s Repsol SA, which owns a stake in a large Venezuelan oil field, plans to attend the meeting, and India’s Reliance has been invited, according to some of the people.
So far, the roster sounds like a well-rounded international group.
Here's to the future for Venezuela.
No doubt more monkey wrenches to come for the bad guys, and that's okay.
Ed, David, John, and I work hard every day here at HotAir in our efforts to continue revealing Democrats' plans to lead America down a dangerous path.
But we can't do it without the help and support of our tremendous VIP community.
Please help us continue to expose Democrats, progressives, and the media's left-wing bias by reading news you can trust. Join Hot Air VIP and use promo code FIGHT to get 60% off your membership!
Join the conversation as a VIP Member