U.S. Secures 100-Year Venezuelan Oil Rights, Gasoline Prices Unchanged [Current Affairs Show]

U.S. Gasoline Holds at $4 a Gallon
Midterm Elections Loom as Public Sentiment Worsens

■ Broadcast: The Asia Business Daily 'So Jongseop's Current Affairs Show'

■ Host: Political Specialist So Jongseop

■ Director: PD Lee Kyeongdo

■ Guest: Reporter Lee Hyunwoo

U.S. President Donald Trump has secured rights to large-scale oil development projects in Venezuela, yet gasoline prices in the United States remain stubbornly high. The main issue has shifted from crude oil shortages to a lack of refining capacity to process crude oil into gasoline, diesel, and other petroleum products. There are growing concerns that it will be difficult to fundamentally resolve the shortage of refined products until the wars in Ukraine and Iran come to an end.

Trump Boasts Securing 65 Billion Barrels of Venezuelan Oil, But U.S. Gasoline Prices Remain High

AP Yonhap News

Recently, President Trump emphasized that the United States had secured the rights to develop vast quantities of oil in Venezuela over a long period. The amount of crude oil involved is estimated to be about 65 billion barrels. There were expectations that acquiring such a massive amount of oil would lower gasoline prices in the U.S., but in reality, the opposite has occurred.

In recent months, gasoline prices in the U.S. have stayed high, around $4 per gallon, putting increased pressure on consumers. As the midterm elections approach, the high oil prices are also creating considerable political challenges for the Trump administration. Since American voters regard fuel prices as a key marker of the cost of living, persistently high gasoline prices could also influence voting preferences.

The greatest concern is not crude oil supply, but insufficient refining capacity. No matter how much crude oil is secured, if there are not enough refineries to process it into gasoline, diesel, jet fuel and other end-products, it is difficult to quickly increase supplies of petroleum products available to consumers.

In addition, the ongoing conflict between the U.S. and Iran has disrupted crude and refined oil exports from the Middle East, while the war between Russia and Ukraine has further destabilized global refined product supply chains. Especially, Ukraine's repeated attacks on Russian refineries have significantly reduced Russia's capacity to produce refined oil products—identified as a key factor pushing up global gasoline and diesel prices.

As Russian Refined Product Exports Fall, Demand Shifts to U.S.—Gasoline Prices Spike

Reuters Yonhap News

As Russia's exports of refined products have declined, countries that previously relied on Russian supplies are now seeking alternative sources. With demand for refined products in Europe, Asia, and Latin America converging on the U.S. market, American refineries are facing heavier burdens.

U.S. refiners are operating existing facilities at maximum capacity and activating backup equipment, but it is proving difficult to meet the surge in both domestic and international demand. While refiners are benefiting from high refining margins, which boosts their profitability, for U.S. consumers, elevated gasoline prices persist as a structural issue.

Venezuela is also unlikely to resolve the U.S. gasoline supply shortfall anytime soon. Despite holding some of the world's largest oil reserves, Venezuela's refineries and associated oil infrastructure have been severely aged by prolonged economic hardship, U.S. sanctions, and a lack of investment.

Although, on paper, Venezuela appears to have a considerable amount of refining capacity, in reality, the number of operational facilities falls far short. This is one reason Venezuela, despite being a major oil producer, has had to import some gasoline and refined products from abroad in recent years.

Ultimately, for the U.S. to fully utilize Venezuelan crude oil, there needs to be large-scale investment not only in oilfield development, but also in refineries, pipelines, and port facilities. It will likely take years to build new refining facilities and restore production capacity to normal levels, making it difficult for the new oil deals to have a short-term impact on U.S. gasoline prices.

With the midterm elections approaching, President Trump is urging major refiners to expand supply and stabilize prices, while also seeking to ease regulations to allow more imported refined products. However, given the global shortage of refined products, boosting overseas imports alone is unlikely to significantly reduce prices.

Gasoline Prices Likely to Stabilize Only After Ukraine and Middle East Wars End

In the end, analysts say that for U.S. gasoline prices to truly stabilize, international supply conditions must improve—either through normalization of Middle East supply chains, or recovery of refined product output lost due to the Russia-Ukraine war.

This situation could also affect Korea. Korea has extensive refining facilities and strategic oil reserves, which give it relatively greater flexibility than many other countries, but if international gasoline and diesel prices stay high for an extended period, this could lead to higher domestic fuel prices, logistics costs, and production expenses.

In summary, the central issue with high oil prices is not just how much crude oil is secured, but how quickly and stably it can be refined and supplied to the market. While Venezuela's massive oil reserves may bolster America's long-term energy security, they are unlikely to serve as an immediate solution to lowering prices at the pump.

This content was produced with the assistance of AI translation services.