Could the Venezuela oil deal drive down U.S. fuel prices?
AILSA CHANG, HOST:
For the past six months, U.S. gas prices have been sky-high as the country has been at war with Iran. Now, the Trump administration has announced a deal to acquire 65 billion barrels of oil from Venezuela, which means drivers all over the country want to know, will we get relief from these high gas prices anytime soon? NPR energy reporter Willa Rubin joins us now. Hi, Willa.
WILLA RUBIN, BYLINE: Hi, Ailsa.
CHANG: OK. Well, let's start with what's happening now. Like, have there been any immediate price changes because of this news?
RUBIN: So not for gas and diesel prices. Right now, nationally, gasoline prices are averaging a little over $4 a gallon. That's around where they've been over the past few months. Now, I've been watching the price of crude oil. It actually ticked up very slightly since the news of the Venezuela deal. I spoke with Jaime Brito - he's the executive director of refining and oil products for Dow Jones Energy - about whether he thinks this deal could affect anything soon for American drivers, especially before the midterms. And here's what he said.
JAIME BRITO: It's not going to change, you know, market fundamentals in 2026. It's not going to change consumer prices next year. So I don't see any (inaudible) way in which this can benefit, you know, voters or consumers between now and November, let's say, of this year.
RUBIN: Yeah. You know, fuel prices have been a real sore point among Americans. A gallon of gas is up 40% in the last six months. The price of diesel is within 20 cents of an all-time high.
CHANG: Wait - explain this to me. I mean, Venezuela is sitting on so much oil, right? Why would this not make a difference?
RUBIN: You are right. Venezuela is sitting on a ton of oil, but that does not mean that it's possible to extract or refine all of that oil that it's sitting on anytime soon because the fields, Ailsa, that are being discussed, they're largely underdeveloped. And also, a lot of Venezuela's existing oil infrastructure has been in disrepair. Alejandro Velasco, a historian at New York University - he says, if you were to walk around oil facilities there right now...
ALEJANDRO VELASCO: You would see rusted equipment, which is indication of corrosion and lack of upkeep, lack of maintenance.
RUBIN: You'd see leaks, broken fences where copper thieves came in to steal wire. Velasco and other analysts say it will take years and billions of dollars to repair or build new infrastructure. There are also, you know, a lot of questions about this deal. Like, who is going to run it? The U.S. does not have a national oil company, and on Venezuela's side, the country is run by an unelected interim president. All this to say, this oil will not be showing up at the pump or in the U.S. strategic reserve anytime soon.
CHANG: Also, let's remind everyone, a lot of what's going on with gas prices is directly connected to the Strait of Hormuz, right?
RUBIN: Totally. Venezuela's contribution to the global oil supply is small. It's only about 1%. And the Strait of Hormuz is a much bigger factor. Normally, you know, prewar, about a fifth of the world's oil supply passed through the strait. Over this past weekend, the U.S. and Iran started trading fire again. And Patrick De Haan, a petroleum analyst at GasBuddy - he put the Venezuela deal in this context.
PATRICK DE HAAN: While there's the potential that years down the road, there's going to be significant sums of additional oil in the market, none of that matters now. What matters now is that there are new escalations and that risk is in real time.
RUBIN: And, you know, plus, Ukraine has been firing at Russian refineries - that's taken a bunch of refining capacity offline, and it's shrunk the global supply of refined oil.
CHANG: And real quick, Willa, is there anything else the Trump administration is doing to try to bring down gas prices?
RUBIN: Yes. They're trying to do some things that could lower the price of gas a bit. They've approved an extension to a waiver of the Jones Act to make it easier for more ships to deliver oil to U.S. ports. They're also letting oil producers roll out what's called a winter blend gasoline a little early, which is cheaper for producers to make. It could boost the gas supply a little bit, but nothing is a silver bullet.
CHANG: No silver bullet. That is NPR's Willa Rubin. Thank you, Willa.
RUBIN: Thank you so much.
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