When President Donald Trump on Saturday, Jan. 3, held a press conference to announce the capture and removal of Venezuelan president Nicolas Maduro, part of his remarks focused on Venezuela’s oil business.
The country has the world’s largest proven oil reserves, estimated at more than 300 billion barrels as of 2020. At one time, the South American nation was also one of the world’s largest oil exporters, but business has slowed considerably since the turn of the century. In 1999, the country exported nearly 3.2 million barrels of crude per day. In recent years, exports fell below a million daily barrels.
Similarly, U.S. imports of Venezuelan oil fell during that period. In 2000, according to the U.S. Energy Information Administration, imports hit 1.3 million barrels/day. In 2024, that had fallen to 231,000 barrels, according to Denton Cinquegrana, Chief Oil Analyst for Oil Price Information Service (OPIS).
President Trump said American oil companies would “spend billions of dollars” to “fix the badly broken infrastructure, the oil infrastructure, and start making money for the country.” How or when that might even begin remains to be seen. Current world oil market dynamics already provide a measure of disincentives to producers to ramp things up.
- Prices for crude oil are already lower than what many oil producers would like.
- WTI crude prices sat below $56 a barrel as of Wednesday, Jan. 7, while Brent crude was just below $60 a barrel: near five-year lows for both commodities.
Truck owner-operators and fleets have enjoyed the results of barrel-price decline at the pump. Recently, retail diesel prices fell below $3.50 a gallon for the first time since June 2025 and approached averages not seen since late 2021. In EIA’s latest weekly report for the week ending Jan. 5, the national average price was $3.48 a gallon.
“Who knows what’s going to happen in the next year or two years,” Cinquegrana said. “I can tell you right now there's going to be no short-term impacts on diesel prices for now. That is a kind of, if anything, an end-of-decade type thing. Maybe within the next couple of years, they could add a couple hundred thousand barrels a day and get back over a million barrels a day" with infrastructure buildout and improvement. "Even that’s going to be a heavy lift, especially when you have oil prices that are $56 a barrel.”
Cinquegrana added that oil producers won't be "tripping over one another to start producing or investing billions and billions of dollars of capital in a place that’s still not safe. Let’s get safety and leadership installed first before we even consider going in there to start producing or investing.”
Matt Muenster, Chief Economist for transportation management firm Breakthrough, said it became clear quickly after the news of the U.S. action in Venezuela that global oil market impacts would be minimal. The days since the event have “been modest market moving days,” he said. “No real jump or drop in crude oil prices.”
For the U.S., Venezuelan oil isn’t a necessity, he added. “It’s not like there’s a tightness in the market that would require us to be importing Venezuelan products."
Muenster noted, however, that oil refiners along the Texas Gulf Coast do lean on refining heavy crude oils, which is what comes from Venezuela. “These oils, generally speaking, for diesel consumers have a positive impact in the refinery base because they can often lead to higher diesel yields,” he said.
But with Venezuelan production as low as it is, not much change is expected short-term.
Independent oil market analyst Tom Kloza offered similar analysis, calling the market “bearish” for the producers. “The crude oil market is already oversupplied,” he said. "The prospects for 2026 are that this is going to be a cheap year for crude. It’s going to be a much cheaper year than the last three years for diesel, and it’s going to be the cheapest year for gasoline since the COVID year of 2020.”
If oil prices fall much further, Kloza said producers would get close to a break-even point of sorts, and begin to cut back on production to create more supply-side pressure to bring up pricing.
“We’re above break-even” for now, he said. “There are probably some fields in the Permian [Basin] and New Mexico and Texas that probably need something in the mid-$50s [per barrel], but it has to do with how much debt some of the operators have and things like that. … We’ll start to worry about that, I think, when prices drop below $50.”
Breakthrough’s Muenster added that $56/barrel is below the "range at which some production is profitable.” If oil were to drop below $50, “I wouldn’t expect that lower price could linger for an extended period of time,” he said. “There’d be more pressure put back in the market based on changes to production.”
OPIS’ Cinquegrana said producer production cuts to impact pricing would definitively produce the ripples that lead to higher gas and diesel prices, “but I don’t think that’s gonna happen anytime soon,” he said.
[Related: Bye-bye 2025: Hope and headwinds for freight, costs, regs in focus]
2026 diesel outlook
Diesel prices hit their the 2025 high mark of $3.87 a gallon national average during the week ending Nov. 17, and have fallen since to the most recent week’s $3.47 a gallon.
Kloza believes the trend will continue through the first quarter, with the national average ultimately below $3.25. “I think it will be the cheapest year since 2021,” he said. “High prices really came with the Ukraine-Russia war," starting in 2022. "We’re going back to sort of where the numbers were pre-war.”
If that war sees a resolution and “if Russia gets back in the good graces of Europe and otherwise, then you’re really talking about deflationary prices and energy,” Kloza added. For oil producers who would like to see higher oil prices, “it’s hard to be a bull under the circumstances.”
Breakthrough’s projections for 2026 are in line with those: Muenster expects price reductions “front-loaded, so I have greater confidence that Q1 will continue to see lower diesel prices.”
Longer term, he added, “geopolitics remains the focus of upside risk. However, when an event like [Venezuela] happens and there’s a very muted response from the market, it helps give you that signal that, right now, short of something very drastic, these geopolitical events aren’t going to shift market prices.”
OPIS expects diesel prices for 2026 to ultimately be in line with 2025’s prices, steady, around $3.54 a gallon on average for the year, Cinquegrana said. “I don’t see anything out there that would suggest we’re in for a big kind of spike in prices.”
One area where Kloza sees the biggest negative impact of the current low-price environment for oil is for producers of biodiesel and renewable diesel.
“You’re not seeing the prices for soybean oil and things like that drop,” he said. “Everybody in that sector, the bio sector, has really been struggling for a couple years, and it looks like they’re going to struggle some more because they really need higher prices for legacy diesel, for hydrocarbon diesel.”
[Related: Diesel prices down 37 cents since hitting 2025 high mark, reefer rates on holiday tear]
