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The bottom line regarding the US-Venezuela situation is the former now has more crude oil supplies to both refine and sell on the global market.
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There is an argument being made that this will increase the domestic US crude oil price while lowering prices for gasoline and diesel over time.
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Both the WTI and Brent markets are in position to see increased noncommercial buying interest early this week.
What does the US-Venezuela situation mean for crude oil markets, both global Brent and domestic (US) West Texas Intermediate (WTI)? We know the US president stated Venezuela would now “give” the US 50 million barrels of oil, an amount roughly valued at $3 billion. According to a story on CNBC, the US president added, “the money will be controlled by me…”[i]. What a shock, right? For now, let’s try to set all this aside and focus on crude oil’s market structure, and how it might change during 2026.
Let’s start with the noncommercial side. Applying Newton’s first law of motion to markets we know a trending market will stay in that trend until acted upon by an outside force, with that outside force usually the flow of investment money. A look at the chart for WTI crude oil futures created by pulling CFTC Commitments of Traders report (legacy, futures only) numbers and we see the flow of investment money has not change. Back in early February 2018 funds held a net-long futures position of 739,100 contracts. This included long futures of 862,100 contracts. Fast forward to the latest update, for the week ending Tuesday, January 6, and we see funds held a net-long of 57,352 contracts, a decrease of 7,239 contracts from the previous week. The chart also shows us the net-long futures position is within sight of its recent low of 39,800 from October 21, 2025. This sets the stage for a possible change in the outside force. But the investment side needs a fundamental reason to change its mind[ii], creating the debate over if we could now view crude oil’s supply and demand situation as bullish.
A friend from central Illinois called last week raising the question of a more bullish fundamental picture for US crude oil. Supplies that will be “given” to the US from Venezuela are heavy crude, the type used by Gulf Coast refineries, meaning more oil will be turned into gasoline and diesel. And if the US is turning more toward a petroleum-based economy, and away from “green” energy, then theoretically it would increase demand for heavy crude oil, possibly lifting the price of crude in relation to RBOB gasoline and distillates (diesel, jet fuel, heating oil, etc.) futures.
