Publications: Notes at the Margin

Ominous Signs for Crude Prices (January 5, 2026)

 

Three developments ensure that the current global oil surplus will result in much lower prices: falling US gasoline prices, the Saudi-UAE dispute, and the United States' capture of Venezuela's President Nicolas Maduro. Indeed, following the US action in Venezuela, the oil-exporting nations, led by the UAE, may abandon production discipline. Prices could again plunge to $10 per barrel, as they did in 1986, 1999, and 2020. Such a decline would deprive the “very large United States oil companies” of the cash needed to rehabilitate Venezuelan output. It would also reveal the absurdity of US “energy dominance.”

 

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