US secures stake in Venezuela's 65 billion barrels as August gas averages $4.09
Trump said the US has locked up majority control of Venezuela's 65 billion barrels of oil reserves, calling it the biggest oil deal in history. For Gulf Coast refiners built to run heavy sour crude, that matters more than the headline number. Those plants have spent years scrambling for the kind of barrel Venezuela produces, and a US-brokered opening on Venezuelan supply could reshape where they buy.
Venezuela and OPEC
Venezuela pumped 1.117 million barrels a day in July and is currently exempt from OPEC production quotas. Now Bloomberg reports Caracas is weighing whether to leave OPEC entirely, with US officials in the room for the discussions. Venezuela helped found the cartel six decades ago, so a walkout would carry weight beyond its modest output.
Watch the refiners with skin in this. Marathon Petroleum and two other US refiners are already flagged as tied to changes in Venezuelan crude flows. If sanctioned barrels start moving under a new arrangement, the heavy-sour discount and who captures it could shift.
Record at the pump
The national average for regular is $4.09, a cent below last week. That sounds calm until you look at the month: for the first time ever, the August average has been above $4 every single day, putting this month on track to pass the 2022 record as the most expensive August at the pump.
Demand is the reason it isn't easing. EIA data shows gasoline demand jumped from 8.68 million barrels a day to 9.04 million last week. Crude is holding around $80 on continued volatility in the Strait of Hormuz, so refiners aren't getting relief on the front end either. Trump is set to meet US oil refiners next week to talk about the high prices, which could bring pressure on margins or just a photo op. Hard to say which yet.
Russia's refineries
Ukraine launched a record number of strikes on Russian oil refineries in August, and the damage has pushed Russia to import jet fuel to cover the shortfall. This is a foreign story, but it feeds the global product balance. Fewer Russian barrels of refined product on the export market tightens diesel and jet supply everywhere, and US crack spreads take their cues from a global pool.
What to watch
Whether the Venezuela deal actually moves crude, or stays an announcement. What comes out of Trump's refiner meeting next week. Whether Colorado's push for tighter rules on Suncor's Commerce City plant tightens supply in the Rockies. And whether August demand holds into the Labor Day pull, which could keep the pump average near record levels a while longer.