Venezuela Off Balance. The Energy Report 02/27/2025

 President Trump has had success bringing down oil prices by sheer force of will and keeping traders off balance. Perhaps the biggest success has a lot to do with not only signaling to the world that the US oil and gas industry is open for business, but his leadership on the world stage with a ceasefire between Hamas and Israel and a potential peace deal between Russia and Ukraine and back to maximum pressure on Iran and now Venezuela.

President Trump on Truth Social said, “We are hereby reversing the concessions that Crooked Joe Biden gave to Nicolás Maduro, of Venezuela, on the oil transaction agreement, dated November 26, 2022, and also having to do with Electoral conditions within Venezuela, which have not been met by the Maduro regime. Additionally, the regime has not been transporting the violent criminals that they sent into our Country (the Good Ole’ U.S.A.) back to Venezuela at the rapid pace that they had agreed to. I am therefore ordering that the ineffective and unmet Biden “Concession Agreement” be terminated as of the March 1st option to renew. Thank you for your attention to this matter!” Yet the threat, once again, comes with the deadline and a call to action that could keep the disputed President Maduro, Chevron and President Trump happy.

Chevron has been lobbying the Trump administration to allow them to continue to do business in Venezuela. US refiners covet Venezuelan heavy oil. And while President Trump doesn’t like Maduro, he might be OK by keeping Maduro in check especially if they live up to the demands that Trump is giving them. President Trump holds all the cards, and he knows it, and he’s playing his hand brilliantly. Either Maduro complies or his economy collapses. President Trump then will continue to push Venezuela to have a free and fair election which if they do, Maduro will be looking for a job. Oil prices that are rallying on the Venezuelan threat.

Crude oil sold off yesterday partly because of President Trump’s comments on the possibility of a ceasefire between Russia and the Ukraine. Trump said, “I think we’ll have a deal with Putin. Putin had no intention of settling the Ukraine war. Putin will have to make concessions on Ukraine. We’ll have good relationships with China, Russia, and the Middle East. Zelensky is coming to sign the deal. I will not be making security guarantees in Ukraine, Europe will. Won’t make security guarantees beyond very much, we will be partnering with Ukraine on rare earth.”

Oil prices also saw some downward pressure yesterday after President Trump threatened Iraq with sanctions which in turn had them settling the dispute. Iraq confirmed that, “A deal reached with Kurdistan to resume oil exports.”

Still the crude oil market has a big upside threat with Iran. President Trump is cracking down on those that do business with Iran especially entities in the United Arab Emirates, This this comes as the Wall Street Journal reported that Iran has sharply increased its stockpile of highly enriched uranium in recent weeks, according to a confidential United Nations report, as Tehran amasses a critical raw material for atomic weapons. The increase in Iran’s holdings of uranium enriched to 60%, or nearly weapons grade, gives it enough to produce six nuclear weapons. Iran is now producing enough fissile material in a month for one nuclear weapon, according to the report, which was reviewed by The Wall Street Journal.

Israel is saying that a “military option” could be required to stop Iran from building nuclear weapons and will ask U.S. President Donald Trump for help in ramping up pressure on the Islamic Republic, according to Israeli Foreign Minister Gideon Sa’ar. What President Trump would do is clear what he would do with Hamas. US President Donald Trump says he’s “very disappointed” about the bodies of four hostages being released today by Hamas as part of the ceasefire agreement with Israel. “They think they’re doing us a favor by sending us bodies,” Trump says of Hamas. “This is a vicious group of people.” “At some point, somebody’s going to say, we got to do something about this,” Trump says during a cabinet meeting.

He reiterates that Israel will have to decide how it wants to proceed with the ceasefire. Trump has repeatedly suggested that he might have returned to the war if he were in Israel’s shoes. He reflects on how badly the families of slain hostages want their loved ones back. “I’ve spoken to a lot of the parents and a lot of the people involved. They want those bodies almost as much and maybe even just as much as they wanted their son or their daughter. It’s amazing, “Please, sir, please. My son is dead, but they have his body. Please. Can you get it for us?’” he recalls.

It is kind of crazy that we have one of the coldest weeks ever and yet we saw a big build in distillate inventories. Did everyone turn their heat off?

Welcome to the crazy world of oil trading and EIA oil inventories. The EIA put U.S. commercial crude oil inventories decreased by 2.3 million barrels from the previous week. At 430.2 million barrels, U.S. crude oil

inventories are about 4% below the five-year average for this time of year. Total motor gasoline inventories increased by 0.4 million barrels from last week and are slightly below the five-year average for this time of year. Distillate fuel inventories increased by 3.9 million barrels last week and are about 8% below the five-year average for this time of year.

Total products demand based on product supplied over the last four-week period averaged 20.3 million barrels a day, up by4.2% from the same period last year. Over the past four weeks, the motor gasoline product supplied averaged 8.4 million barrels a day, down by 0.1% from the same period last year. Distillate fuel supplied averaged 4.2 million barrels a day over the past four weeks, up by 13.1% from the same period last year. Jet fuel products supplied was up 4.5% compared with the same four-week period last year.

Natural gas is trying to fight off warm weather. Big report on natural gas today.

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