Trump is playing His Venezuelan Oil Card. The Energy Report 02/03/2026

Increasing Venezuelan oil exports after President Trump’s successful removal of the Venezuelan dictator and drug kingpin Nicolas Maduro, is already having a positive impact not only on lowering US energy prices but on geopolitics as well. President Trump using his Venezuela oil card to not only lower oil and product prices in the US, as he has successfully done, but also secured a deal from India to buy oil from Venezuela rather than Russia, in exchange for removing tariffs from the oil hungry nation.  

The President on Truth Social posted that, “The U.S. will lower its 25% “reciprocal” tariffs on India to 18%, and India will stop buying Russian oil “to buy much more from the United States and, potentially, Venezuela,” India will reduce its tariffs on U.S. goods to zero, Trump said, adding Modi committed to “BUY AMERICAN” with a $500 billion purchase of U.S. energy, technology, agricultural, coal and other goods”  and it also includes products like data centers, planes, precious metals, cooking coal, and energy.

Russian Deputy Prime Minister Alexander Novak seemed a bit surprised saying that said Russia is only aware of public statements regarding India’s possible reduction in Russian oil imports. The Kremlin noted it has not received any official word from India about stopping oil purchases. At the same time he has indicated that OPEC+ anticipates a rise in oil demand during the spring and summer months, and he emphasized that this increase in demand will contribute to achieving balance in the oil market. Additionally, Novak agreed with the expectation of OPEC+ actions in April, noting that the market is currently experiencing a balance between oil supply and demand, which I agree with in part thanks to US policy and more exports from Venezuela that is surging more than  800,000 barrel per day in January up from 498,000 barrels a day in December, which is a surprise to many Trump critics of the U.S. with the capture of Nicolas Maduro.

Reuters reported that easing the US blockade allowed Venezuela to export over 40 million barrels of crude and fuel previously stored in tanks and vessels, prompting PDVSA to boost production. After the US Treasury granted export licenses to Trafigura and Vitol in January, oil production and shipments from Venezuela increased, with January exports nearing last year’s average of 847,000 bpd. However, exporters still need to quickly clear remaining inventories before fully restoring output. Yet with a stable Venezuela we expect to see the production come online a lot faster than the naysayers were saying.

The big sell-off in the petroleum market was due to more than just Venezuela; falling precious metals prices and overall risk aversion in commodities played a role as well. The reduced threat of an imminent attack on Iran also lowered the risk premium that had previously supported prices. President Trump has indicated negotiations with Iran are ongoing, including possible discussions on uranium enrichment, which marks a shift from previous talks. While there is skepticism about Iran’s reliability following internal violence, Trump appears interested in avoiding wider conflict, though many believe the Iranian government remains unstable. Maybe President Trump has different ways to pressure a regime change without using weapons. As we said, it’s been in a trading range, and even though it seemed like we were trying to break out to the upside, we really are still in the same range we’ve been in for years. That signals a market that is in balance and should continue to be in balance for the short term. On the flip side, we do see demand expectations rising as the U.S. economy continues to grow, and President Trump’s stability on the global economy is going to reap benefits for the global economy as a whole. Crack spreads should recover here a little bit based on the strong demand that we expect to see and the trade levels have been a good way to try to figure high and low levels for the price. Call Phil Flynn 888-264-5665 to learn more about crack spreads.

And I told you to keep an eye on the Fox Weather app and download it because the switch in the weather forecast had a major impact on natural gas yesterday. Not only did the warm up crush natural gas but also the overall commodity sell off and the fact that reports in Europe say that they’re back to buying Russian natural gas. But before you stay too bearish on natural gas, Fox Weather is warning that, “The bitter cold temperatures that have left a chill over the eastern half of the country aren’t going anywhere, as a major disruption to the Polar Vortex is coming this month.”

On top of that it was reported that natural gas flows to U.S. LNG plants hit a one-year low on January 26. Freeport LNG in Texas was partly offline due to the freeze, and Kinder Morgan’s Elba Island facility in Georgia imported LNG from Trinidad and Tobago after halting feedgas intake during that week. Not exactly bullish.

Keep an eye on the possible refinery strike. Yesterday Reuters reported that Sunday, Marathon Petroleum made its final proposal to the United Steelworkers (USW) for a new four-year labor agreement covering U.S. refineries and chemical plants, offering a 15% wage increase over the contract period for 30,000 USW-represented workers. The deal would include a $2,500 signing bonus and annual pay raises—4% in the first year, 3.5% in the second and third years, and another 4% in the fourth year—retaining other terms from previous contracts. Marathon, the largest U.S. refiner and lead negotiator for 26 companies including Exxon Mobil, Chevron, and Valero, operates 16% of national capacity, with USW workers accounting for nearly two-thirds of the country’s refining capacity. The outcome of these negotiations will influence labor contracts at refineries nationwide. The USW has not yet accepted or rejected the offer, and is consulting members before making a decision, while the current contract remains in effect through rolling 24-hour extensions until further notice of a strike or lockout is given by either party.

Also, yesterday Venezuela has shipped its first-ever liquefied petroleum gas (LPG) cargo to the US. Interim President Delcy Rodriguez announced the milestone, calling it an achievement.  See Delcy, you can do amazing things when you move away communist dictatorship and move closer to the free markets. Now make sure you release some more political prisoners while you’re at it.