US Don Announce Venezuelan Oil Deal, But Fuel Price Fit No Come Down Soon

Wetin Don Change

Based only on Al Jazeera report, US don announce oil deal wey involve Venezuelan reserves and joint venture with North American Blue Energy Partners. Di report talk say Venezuelan crude hard and cost plenty to extract and refine, so analysts no expect US fuel price relief anytime soon.

Why Dis Matter

Our view: see am as possible supply project, no be promise say fuel go cheap for filling station dis week. For working household wey dey watch petrol cost, longer commute, or flight price, di immediate pressure still dey come from di disruption around Strait of Hormuz wey di report describe.

Di important difference dey between oil wey dey ground and fuel wey dey pump. Venezuela fit get plenty reserves, but di report talk say to turn dat heavy, sour crude to fuel wey people fit use go take time, equipment and money. Deal fit change who go get access to future output without sharp-sharp changing di number for filling-station sign.

For readers wey no dey US, make dem still dey careful like dat. Oil price dey travel. Disruption for one strategic shipping route fit reach family budget for Lagos, London, Nairobi or Brussels through transport, goods and household energy cost. Dis deal fit later add another route for supply, but e no be instant detour around today bottleneck.

Last Time Wey Dis Happen

For our own earlier reporting, around one day ago, we cover “Iran War Pushes Oil Prices Higher and Stocks Lower”. Dat headline show say di immediate story na disruption wey dey push cost go up. Dis Venezuelan deal matter mainly as attempt to build cushion for later, no be proof say di present squeeze don end.

Wetin To Watch Next

• Whether new Venezuelan output go truly come out and pass through US refineries. Dat one go support di case for more supply wey go dey available as time dey go.
• Whether di Strait of Hormuz blockade go ease or continue. Relief go matter faster for fuel and transport cost; if disruption continue, di near-term pressure go remain.
• Whether fuel price go fall after di deal operations start. If dem no fall, di gap between access to reserves and relief for household go hard to ignore.