⛽ Why Venezuelan Oil Won't Lower Gas Prices

In today’s newsletter I discuss why Venezuelan oil won't lower gas prices, Paramount sues, Baywatch is getting a reboot, Congress restores NASA’s funding, Nvidia CEO and Co-founder Jensen Huang says data centers won’t need as much cooling with their new Vera Rubin AI chips, Ripple partners with AWS to use their Amazon Bedrock service, Apple to integrate Google’s Gemini technology into Siri, and FIFA partners with TikTok for the 2026 World Cup.

Let’s get into it.

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⛽ Why Venezuelan Oil Won’t Lower Gas Prices

Today I want to discuss how Venezuelan oil won't lower the price of gas at the pumps, no matter how much of it the U.S. takes for free. I have to warn you, this is gonna be a spicy topic! Let's get into it.

Let’s level-set for a minute. On January 3, 2026, the U.S. launched a military operation, which they named "Operation Absolute Resolve," in Venezuela in order to capture Venezuelan President Nicolás Maduro and his wife Cilia Flores, before transporting them to the U.S. where they have been charged with drug trafficking. The current Trump U.S. administration claims they took this action, without notifying Congress as they are constitutionally required to do I might add, in the name of the war on drugs in order to combat Venezuelan drug smuggling. At the same time, the U.S. is proclaiming that they will “run” Venezuela for the time being, and that all Venezuelan oil will now be controlled by the U.S.. For the last few months, the U.S. has been striking suspected drug smuggling boats in both the Pacific and the Caribbean, which has been controversial to say the least. Recently, the U.S. said that Venezuela will give the U.S. 30-50 million barrels of their oil for free, and that the U.S. will begin selling Venezuelan oil on the markets and keep some of that money, while releasing what’s left back to the Venezuela government to be spent on modernizing their oil and energy infrastructure.

WoW! Ok, then. Glad I got that out of the way.

Now, as you all know, this channel isn’t about politics, so I want to focus on how no matter how much Venezuelan oil the U.S. takes, it won’t help the U.S. economically or lower the price of gas for consumers for one simple reason: it’s the wrong kind of oil.

Venezuela holds the largest proven oil reserves in the world, with over 303 billion barrels of oil in the ground. It’s much larger than the 267 billion barrels Saudi Arabia has, or the 208 billion barrels Iran has. The United States only has between 45-80 billion barrels of proven reserves, while Russia has 80 billion barrels of oil reserves. At current prices, the total value of Venezuela’s oil reserves is $17.3 trillion dollars. The massive difference between the 303 billion barrels in Venezuela and the 45-80 billion barrels of proven oil reserves in the United States is the very reason Venezuela is so important for the Trump administration: security. The United States wants to make sure those 303 billion barrels of Venezuelan oil are under the influence of the United States, and not Russia or China. This is all about geopolitics, with a tiny footnote mentioning drug smuggling.

The type of oil in Venezuela is a heavy substance that requires specialized refineries and can’t just be processed by any old facility in the world. In the United States, there are dozens of refineries, primarily along the Gulf Coast in Texas and Louisiana, as well as some in California, that can handle Venezuelan oil. Refining this heavy oil requires specialized "complex" configurations to process heavy, sour Venezuelan crude. Only a handful of the major oil companies like Valero, Phillips 66, ExxonMobil, and Marathon have the refineries and capacity to refine Venezuelan heavy oil.

The Phillips 66 Sweeny refinery in Old Ocean, Texas, and their refinery in Lake Charles, Louisiana are the primary refinery sites in the U.S. that are ready today to begin processing this heavy oil. Combined, these two plants can process around 200,000 barrels per day of Venezuelan crude, which is literally a drop in the bucket of how much oil the U.S. consumes in a day. Other Gulf Coast refineries would require billions of dollars in investment to restart their heavy oil refining processes, and it would take years to bring these plants back online.

Right now the current breakeven price for Venezuelan crude oil is $80 per barrel, while the current market price for oil is around $59 per barrel as of January 12, 2026. So, if you try and process Venezuelan crude oil to make gasoline you’re basically losing money on every barrel you process. That’s not a good way to run a business, which is why U.S. refiners aren’t thrilled about the current U.S. administration's recent acquisition of exclusive physical rights to Venezuelan crude oil. Not to mention that the refining capacity of the plants that can process Venezuelan crude oil is so small that it won’t even begin to affect the price of gas Americans pay at the pump.

Before the U.S. “acquired” Venezuela’s entire oil supply, the country was sending 389,000 barrels per day to China to pay back some of their $170 billion dollars of debt that they’ve been using to prop up their regime and failing economy. It seems crazy that Venezuela, which has the world’s largest proven oil reserves, is so poorly run that they needed to borrow money from the Chinese, which has resulted in ruining their economy, where the International Monetary Fund estimates Venezuela's inflation rate is a staggering 682%.

Venezuela's national economy is only $82.8 billion dollars a year, which makes this debt a huge burden for the country. Last year total oil sales reached only $17.52 billion dollars, and most of that money did not reach the citizens. Instead, it was used to service their debts to China. The Trump administration has redirected 50 million barrels, worth $3 billion dollars at today’s prices, into accounts controlled at American banks. It remains to be seen how long this arrangement will last, and what those funds will be used for.

It’s been estimated that rebuilding the Venezuelan oil industry would require an investment of $183 billion dollars over the next 15 years. Their oil industry needs $14 billion dollars in immediate capital just to reach a production level of 1.4 million barrels per day. Their current production is around 934,000 barrels per day, which is less than 1% of the global supply of 106 million barrels used per day.

So, the arrival of Venezuelan oil in the United States is not a quick solution for lower gas prices at the pump, and it’s not going to help the Venezuelan people, government, or their oil industry overnight. The popular belief, stoked by the talking points of the Trump administration, is that adding Venezuelan oil to the U.S. markets will drive down oil and gasoline costs for the average American, but the facts on the ground say otherwise.

Quick Hits

⚖️ Business

Paramount Skydance just doesn't know how to take no for an answer. Since they haven't been able to convince the board of Warner Brothers Discovery that their offer of $30 dollars a share for the entire company is superior to Netflix's offer, they have taken their case to court by suing Warner Brothers Discovery in a Delaware court to challenge the $82.7 billion dollars deal Ted Sarandos and David Zaslav accepted from Netflix. Paramount Skydance have made an offer of $108.4 billion dollars, of which $40.4 billion dollars is being guaranteed by Larry Ellison, the father of Paramount Skydance CEO David Ellison, as well as $54 billion dollars in debt being financed by a number of Middle Eastern sovereign wealth funds. Looks like this corporate boardroom battle royale will be fought in a Delaware court and decided by a jury.

🏊‍♀️ Entertainment

In incredibly exciting news for people who can’t get enough of slow motion running on beaches, the classic TV show Baywatch is getting a long-awaited reboot with twelve new episodes coming to Fox in 2026. California Governor Gavin Newsom recently approved an expansion of the California film and television tax credit program to $750 million dollars per year in order to support the local economy and the thousands of workers who depend on Hollywood for their livelihood. In completely unrelated news, if anyone needs me I’ll be in the gym working on my dad-bod in case they need any middle-aged extras.

🕋 Tech

Nvidia CEO and Co-founder Jensen Huang just introduced a new line of Vera Rubin AI chips that might not require the same expensive data center cooling systems that the industry currently uses, which would result in a massive cost savings for data center operators. Shares of data center cooling technology companies like Vertiv Holdings and Modine Manufacturing fell by more than 10% on the news. It turns out that betting billions of dollars on giant fans and liquid cooling isn’t a foolproof strategy for building wealth. Who would have thought?

🪙 Crypto

Ripple Labs CEO Brad Garlinghouse and AWS are exploring the use of Amazon Bedrock to analyze XRP Ledger system logs, which currently generate between 30-50 gigabytes of data per node every single day. This technical collaboration aims to reduce the time it takes for engineers to diagnose network issues from 2-3 days down to between 2-3 minutes. Just another sign that Ripple’s XRP is upending traditional finance and the $156 trillion dollars that moves across borders worldwide each year.

🚀 Space

Congress just showed they do have a backbone by rejecting the Trump administration's funding proposal for NASA that only offered $18.8 billion dollars of the proposed $24.4 billion dollars in funding for the agency. This massive funding plan approved by Congress restores $5.6 billion dollars that Donald Trump wanted to cut, while at the same time his administration is demanding that NASA return to the moon to beat the Chinese. It’s nice to see that the U.S. Congress actually wants to pay for our country’s space dreams, instead of just relying on hopes and dreams to get back to the moon.

🤖 AI

Tim Cook announced that Apple will integrate Google’s Gemini technology into Siri to improve their AI for the hundreds of millions of iPhone users around the world. This partnership involves a multiyear agreement for Google to receive between $18-20 billion dollars a year to remain Apple’s default search provider and provide AI services. Here's hoping that when my mom asks Siri what the weather is going to be like today she’ll actually get an answer that doesn’t explain the entire meteorological process of how rain clouds are formed.

⚽ Sports

TikTok and FIFA have entered into a partnership for TikTok be the Preferred Platform for the 2026 FIFA World Cup tournament. This deal connects TikTok to the World Cup, which is projected to generate over $11 billion dollars in revenue while reaching an estimated global audience of 6 billion people worldwide. Just what the world needs, more Gen Z teenagers dancing in their kitchens celebrating their team scoring a goal in the World Cup!

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The Business Behind The News is written, edited, and published by Chris Thompson.