No Mercy. The Energy Report 01/19/2026

On Martin Luther King Day, oil prices are dropping as civil unrest in Iran calms down, reducing the likelihood of an imminent U.S. attack that could disrupt supply from this major Middle Eastern producer. Additionally, oil sales from Venezuela are finding their way into U.S. refineries, further stabilizing the market. President Trump hinted that the cessation of violence in Iran is a significant factor in holding off any military action. This is good news for the energy market and us consumers of oil even as the world is upset with President Trump over his Greenland tariff,
Yet, if you listen to the leader they call Iran’s Supreme Leader, Ayatollah Ali Khamenei, “We do not intend to lead the country to war, but we will show no mercy to domestic seditious elements nor to international criminals,” it suggests that the Iran story may not be over just yet.  President Trump may have some more tricks up his sleeve to deal with oppressive murder regime .  Ans with the promise of increased oil supplies from Venezuela and mixed economic data from China, the market is confidently anchored in the belief that we will remain well-supplied, especially here in the United States.
In another sign that President Trump’s policies are winning economically the International Monetary Fund has conceded that President Trump’s tariff policies haven’t stoked inflation, prompting an upward revision in their growth expectations! The global economy is showcasing remarkable resilience, with a projected growth rate of 3.3% this year, mirroring last year’s performance. This robustness is largely driven by a surge in AI investments across North America and Asia, effectively mitigating trade disruptions. Even more exciting, the US economy is now forecast to grow by 2.4% this year, marking an impressive upgrade from previous predictions.
The Wall Street Journal has reported that China’s economic growth in the past year was primarily driven by a significant increase in exports. This surge allowed the country to surpass expectations that ongoing trade tensions with the U.S. would impede its expansion. According to the National Bureau of Statistics, China’s gross domestic product grew by 5% in 2025, adjusted for deflation, which met both Beijing’s official target and matched the real GDP growth recorded in 2024. However, this growth has become increasingly uneven. Exports have fueled the economy to an extent not seen in nearly three decades, while domestic investment and consumer spending have remained weak. This imbalance has garnered criticism from China’s trading partners and international organizations. As Xiangrong Yu, chief China economist at Citi, pointed out, “We have an uneven recovery.”
The Trump administration has kicked off its management of Venezuela with a major win: the first sale of Venezuelan oil, valued at $500 million, signals a new era in U.S.-Venezuela relations. Just 11 days after the ouster of former leader Nicolás Maduro, President Trump has made it clear that the U.S. will oversee Venezuela’s oil operations for the foreseeable future, controlling up to 50 million barrels and ensuring proceeds flow back to the country in an unprecedented arrangement.
Energy Secretary Chris Wright shared the exciting news that the U.S. is now securing approximately 30% higher prices for Venezuelan crude compared to just weeks ago. “We’re getting about a 30% higher realized price when we sell the same barrel of oil than they sold the same barrel of oil three weeks ago,” Wright announced at a U.S. Energy Association event. The Department of Energy confirmed that this $500 million sale marks the beginning, with more deals on the horizon as the U.S. continues to market Venezuelan oil in the wake of Maduro’s departure.
While these achievements unfold, President Trump is also making bold moves on the international stage, threatening to impose a 10% tariff on goods from countries opposing his purchase of Greenland. This tough stance has sent precious metals soaring, although it’s added some uncertainty to the oil market. Nonetheless, the administration’s success in boosting Venezuelan crude prices and securing lucrative sales provides plenty of positive momentum for U.S. energy interests. Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland to face 10% tariff beginning February 1 over Greenland matter.
And right now, with more Venezuelan oil this should help put some downward pressure on diesel prices that for truckers have been a burden at the same time though cold weather is causing some of these spreads to rally. Drivers across the United States—and especially are getting a welcome break at the pump. Gasoline and diesel prices are continuing a solid downward trend that kicked off in late 2025 and shows no signs of letting up. Regular gasoline is now averaging about $2.825 a gallon nationwide as of January 19. That’s music to the ears of motorists! AAA’s latest check on January 18 put it at $2.824, while earlier in the week, we saw $2.844. Diesel? Down to roughly $3.50 per gallon, with steady reports confirming this figure throughout mid-January. This isn’t just a blip—we’re well below the stratospheric highs of recent memory.
Just think gasoline maxed out at $5.02 per gallon in June 2022, with diesel at an eye-watering $5.82. Those days feel distant as price drops have become the new normal, punctuated by only the occasional minor uptick. The numbers tell the story: Gasoline slipped $0.02 (0.6%) in the week ending January 12. Zoom out over the month, and prices have slid from about $2.917 to $2.820 by January 13. Compared to last year, drivers are saving big—gasoline is down $0.27, or nearly 9%!Diesel follows suit, with a $0.02 weekly dip (0.7%) as of January 12, and a $0.06 cut (1.7%) year-over-year. December’s average of $3.615 has now softened further into January, and we’re significantly below November’s $3.822.
Zero in on the Midwest, and the picture looks just as bright. Wisconsin and its neighbors saw all grades of gasoline averaging $2.688 per gallon on January 12—a modest but positive move from $2.670 the week before. Diesel in the region keeps trending downward too, clocking in at $3.365 after weeks of steady decline from $3.635 in early December. The bottom line? For now, lower fuel costs are giving consumers and businesses a little extra breathing room as 2026 gets underway. If you’re filling up t, enjoy the savings!
Just when you thought it was safe to put the gloves away the polar vortex is back and it’s impacting natural gas prices. U.S. natural gas prices jump nearly 10% to $3.41/MMBtu as colder late-January weather boosts heating demand, offsetting high production and softer LNG exports.
U.S. natural gas prices have soared nearly 10% to $3.41/MMBtu, fueled by a burst of chilly late-January weather that’s driving up heating demand! This surge is happening despite robust production and a slowdown in LNG exports, showing just how powerful winter’s grip can be on the energy markets.
Fox Weather warned you and now they say that this Polar Vortex could bring even deeper arctic cold to U.S., freezing temperatures reach Florida. Fox Weather  say that with over 170 million Americans facing below average temperatures, even colder air may be on the horizon thanks to the displacement of the polar vortex that will lock in a deep winter feel and park the coldest air over North America. Meanwhile, Florida will join the rest of the eastern half of the country with temperatures dropping into the 20s Friday.
With over 170 million Americans facing below average temperatures, even colder air may be on the horizon thanks to the displacement of the polar vortex that will lock in a deep winter feel and park the coldest air over North America. In the coming weeks, cold air will continue for parts of the U.S. thanks to the influence of the polar vortex.
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Thanks,

Phil Flynn

Senior Market Analyst & Author of The Energy Report

Contributor to FOX Business Network

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