More Venezuelan oil is coming to the U.S. Here's what that means for gas prices.
The Trump administration says it has completed the first sale of Venezuelan oil to the U.S. — a shipment the president valued at $500 million.
It's part of the administration's push to tap into Venezuela's oil reserves, some of the largest in the world.
What does that mean for U.S. drivers?
Gas is currently at $2.67 a gallon nationally, the lowest it's been since May 2021. But prices have been steadily declining since last November, weeks before the U.S. military operation that captured Venezuela's autocratic leader, Nicolás Maduro.
Will Venezuelan oil push prices even lower?
Economists are divided on when or how much these developments may affect consumer prices.
"If I know prices are going to be lower in the future because I expect this Venezuelan crude, that'll impact prices now," said Dr. Ian Lange, a professor of economics and business at the Colorado School of Mines. He also served as a senior economist on the White House Council of Economic Advisers under President Trump's first term.
However, others say it's too soon for Venezuela to be a factor at the pump.
"It's far too early for any measurable impact on what consumers are paying at the pump — whether prices go up or down — as it would likely take years to see a meaningful increase in oil output there," wrote Patrick De Haan, head of petroleum analysis at GasBuddy, in their weekly price update.
In 2024, the U.S. imported nearly 3.1 billion barrels of crude oil, and just 2.75% came from Venezuela. Even before 2019 sanctions, Venezuelan oil made up roughly 8% of yearly U.S. imports — about the same share Mexico holds today.
In the late 1990s and early 2000s, Venezuela supplied 1 to 1.8 million barrels per day to the United States. Now the country's current production caps at 750,000 barrels per day.
Returning to that higher level of production, if possible, wouldn't necessarily be a good thing for the global oil supply chain.
"A big ramp-up in production from Venezuela would sort of add to an already oversupplied market," said Lange.
In any case, that ramp-up in production hasn't happened yet. Venezuela's oil infrastructure has suffered from years of underinvestment, corruption and sanctions, and so far, U.S. companies appear reluctant to invest in rebuilding it.
"It could take years of positive developments for additional supply to meaningfully move the needle," said De Haan. "The impact on U.S. gasoline prices may ultimately be limited."
Over the past decade, Canadian crude has dominated U.S. heavy oil imports while sanctions have virtually ceased Venezuelan shipments.
Canada now supplies the majority of the heavy crude that American refineries need.
"It's certainly possible that a large increase in the oil coming out of Venezuela outcompetes Canadian oil, even as most of our refineries are going to be in the Gulf Coast," Lange said.
But Lange says Venezuela is not ready to compete in that way right now. It depends on concessions from the Venezuelan government to U.S. energy producers.
Why the U.S. needs heavy crude oil
The U.S. is one of the world's largest oil producers. So why Import billions of barrels per year?
It comes down to the type of oil. The U.S. produces mostly "light crude," which is less dense and cheaper to refine. But American refineries, especially those along the Gulf Coast, are designed to process a mix of light and heavy crude.
"Most of our production of crude oil in the United States is on the light side, and most refineries need a mix of light and heavy," Lange said. "Right now, we get a lot of our heavies from Canada, which may be supplemented by Venezuela in the near future."
Venezuela's oil reserves total roughly 300 billion barrels — about 17% of the world's proven reserves. Much of it is heavy rude, exactly what Gulf Coast refineries need.
If Venezuela can ramp up production, it could mean competition with Canada — and that's good for consumers, according to Lange.
"Refineries would pay less as they play the Canadians and the Venezuelans off each other," Lange said. "And that would lead to a lower price of refined products for the end consumer."
Can prices drop too low?
More oil sounds good for drivers. But flooding an already oversupplied market carries risks.
If crude prices fall too far, American producers start to cut back. Light crude — the kind that the U.S. produces — would become less profitable to drill. The going price for a barrel of oil, roughly 42 gallons, is just over $60.
Experts caution scaling back would mean closing down refineries and cutting industry jobs in places like Texas and the Dakotas.
"If we don't import crude, we'd close a refinery. And that's not good," Lange said. "That's jobs and economic activity."
The cycle of supply and demand continues. If domestic production slows, supply tightens and prices rise again.