Publications: Notes at the Margin

Donald Trump's Venezuelan Oil Blunder (January 12, 2026)

 

The US arrest and removal of Venezuelan President Nicolas Maduro promises to upend oil markets. US Gulf Coast refiners have underutilized coking capacity. Newly available supplies of Venezuelan crude will fill these cokers while refiners reduce the WTI volumes they process. Gasoline supplies may be cut while diesel volumes increase. The displaced WTI, which may total 500,000 to 600,000 barrels per day, will move onto the world market, depressing Brent and WTI prices. At the same time, US Midwestern consumers may see significant decreases in gasoline and diesel prices as Gulf Coast refiners cut purchases of heavy Canadian crude in favor of similar, less expensive Venezuelan oil.

 

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