Amid Record Gas Prices: What is Trump’s Oil Deal with Venezuela?
As I write this article, the average price for regular gasoline in North Carolina is well over $4 per gallon. The price for diesel is even higher, at over $6 per gallon.
At a campaign rally in Gastonia on September 16, Trump claimed that these higher gas prices are "a very inexpensive price to pay for what we’ve done [in Iran],". However, other Republicans are beginning to sound the alarm. Many strategists acknowledge that gas prices are one of the most visible, dynamic indicators of economic strength to the average voter. When gas prices rise, voters notice.
Prior to the U.S. military operation in Iran that began in February, about 25% of the world's petroleum transported by sea traveled through the Strait of Hormuz. With no deal to open the Strait in sight, relief from rising gas prices seems distant.
Amidst a continuing push from members of both parties to seek an end to the war, many Americans seem to have forgotten that just a month before his campaign in Iran began, Trump launched an operation in Venezuela that he promised would lower pump prices for consumers.
On January 3, U.S. forces captured Venezuelan President Nicolas Maduro and his wife, Cilia Flores under charges of drug trafficking and narcoterrorism. While the move was justified under the guise of deposing an oppressive dictator, Trump has expressed a broader desire to expand America's influence in the Western Hemisphere during his second term. Citing the antiquated Monroe Doctrine, Trump has expressed his interest in control over Canada, Greenland, and the Panama Canal. From the beginning, Trump took clear steps to assert U.S. authority over Venezuela's oil reserves.
Even though Nicolas Maduro has spent the last nine months in a Brooklyn jail cell, progress towards an oil deal with Venezuela has been gradual. Back in March, the president eased restrictions on business with Venezuela's state-owned oil and gas company, but this did little to lower gas prices.
Finally, on August 31, the president announced that a variety of private and government-run U.S. firms (even the Pentagon) have obtained shared majority control of over 65 billion barrels of oil in Venezuela. His announcement details that hundreds of billions of dollars will be invested into Venezuela to help rebuild their oil industry. In a press release, the White House boldly claimed, "By the end of the year, there will be at-cost oil flowing to the market to help bring down gas prices for the American people".
Despite this, many analysts are skeptical. Analysts note that Venezuelan crude oil is difficult to process, and the Gulf Coast refineries capable of it are already at capacity. Petroleum infrastructure in Venezuela requires major upgrades to ramp up production, and many oil companies remain hesitant over the long-term stability of the nation.
With the midterm elections only slightly over a month away, high gas prices could pose a serious threat to the Republican Party's success. If Trump's oil deal with Venezuela is truly unable to rapidly lower the cost of petroleum, the Republican Party may have to continue distancing themselves further from the President's war in Iran.