Article gets into the weeds a bit describing how the oil industry works.
Bottom line is oil companies make money whether crude is high priced or low priced.
Key is stability of price. That takes a lot of risk off the table and projects are more likely to be developed.
And much greater access to Venezuelan oil provides that stability so oil projects continue even at lower prices.
As an aside, I believe that by supplying resources closer to home than say the Middle East provides even more security for our country's economy.
Secure energy was, is and will be the key to successful growing the economy._________________________________________________________________________________
The Quiet Prize in Venezuela Is an Oil Shock Tax CutThe Venezuela Operation Is About a Lot More Than Cheap Oil
The operation to remove Nicolás Maduro may prove more economically significant than most commentary suggests. It may not lower oil prices any time soon, but over time it could reduce the supply shocks that do real damage to the U.S. economy.
Begin with the fact that tends to vanish in the “bonanza” chatter: there is no oil shortage right now. The U.S. national average for regular gasoline is $2.82 a gallon, according to AAA. Brent is around $61.15 a barrel. By recent standards, that’s already a world of cheap fuel. It’s also a reminder that anyone selling Venezuela as an instant price-cutter is marketing, not analysis.
But contrary to President Trump’s critiques, that doesn’t make Venezuela economically irrelevant. It means the economics run through a different channel.
How the Oil Shock Tax Works
A rise in the price of oil doesn’t do its macro damage in a gentle, linear fashion. The U.S. economy can live with ordinary price fluctuations. It gets hurt in the tail events—when a disruption hits and prices sprint higher because demand doesn’t politely adjust in the short run. People still drive to work. Trucking still moves goods. Airlines still fly. The price shock lands immediately in headline inflation and quickly becomes a policy problem.
That is where the real vulnerability lies: volatility and the sudden spikes that shove policymakers into the worst choice in economics. Either the Federal Reserve looks through the inflation jolt and risks unanchoring expectations, or it tightens to defend credibility and risks tightening into a slowdown. The 1970s taught us what happens when the Fed gets that choice wrong: an extended stagflation with unemployment above 10 percent. The early 1980s taught us what it costs to get it right: a brutal recession to break the cycle. Since then the episodes have been milder, but the pattern remains: shocks push headline inflation up, and the Fed ends up tighter than it otherwise would have been.
https://www.breitbart.com/economy/2026/01/06/breitbart-business-digest-the-quiet-prize-in-venezuela-is-an-oil-shock-tax-cut/
