The White House has announced a new US-Venezuela oil deal, which the official statement calls the “biggest oil deal in world history.” The deal was signed by Secretary of State Marco Rubio and Secretary of War Pete Hegseth. According to the announcement, the US has gained control of “more than 65 billion barrels of proven oil reserves in Venezuela.” Moreover, the move comes at “zero cost to the United States.” President Donald Trump claims that the deal will “substantially lower gas prices for all Americans, long into the future.” Let’s discuss if the US-Venezuela oil deal will impact the stock and crypto markets.
Will The US-Venezuela Oil Deal Impact Stock And Crypto Markets?
If everything goes according to plan and oil prices in the US go down, it could lead to a significant dip in inflation numbers. Inflation is a major concern for the Federal Reserve right now. Federal Reserve Chair Kevin Warsh delivered a rather hawkish speech at the Jackson Hole meeting. Warsh particularly highlighted inflation concerns. Many anticipate interest rates to go up following Warsh’s speech. However, if President Trump’s oil deal can reduce inflation figures, interest rates could be lowered, which would positively impact the stock and crypto markets.
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However, many experts do not agree that tax payers will see lower gas prices anytime soon from the oil deal. Big investments will be needed to extract the oil. The legality and long-term viability of the agreement is still uncertain. According to David Goldwyn, “Nothing has been published, so we’re really still operating on Tweets and rumors.” Goldwyn served as a State Department special envoy for international energy affairs under President Barack Obama. According to Patrick De Haan, head of petroleum analysis at GasBuddy, “Unless we get some sort of magical 20 cent drop, which is next to impossible, it’ll be a record setting Labor Day in terms of the national average. Gas prices have never been this high this late into the year unfortunately.“