Trump’s Venezuela Strike and the Rising Cost Crisis

The effect on oil markets and prices is undoubtedly a worry. However, the U.S. involvement in Venezuela is expected to have only a limited short-term influence oncrude-oil marketsbecause of a possible worldwide oversupply, large excess manufacturing capability, strong U.S. output and a full inventoryStrategic Petroleum Reserve.

Diesel markets, on the other hand, present a different scenario. Venezuela and other Latin American countries significantly influence global and U.S. diesel prices, as Venezuela and nearby Colombia export heavier crude oil that ishighly suitable for diesel.

Diesel costs are expected to increase if the conditions in Venezuela interfere with oil production and shipments. Consequently,energy and foodAmerican prices may increase significantly — as rising fuel expenses are transferred to customers by the diesel-heavy U.S. transportation industry, affecting rural regions particularly severely.

U.S. Gulf Coast refining facilities are set up to handle Venezuelan crude oil types, and in 2024regional refinery runsreached approximately 8.9 million barrels daily; imports fromColombia and Venezuelaaccounted for approximately 4% of these raw inputs. Although this might appear insignificant, short-run diesel pricesinelasticityand refinery limitations suggest significantly higher regional prices, particularly if alternatives are expensive or take time to reach.

Oil roiled

Sudden increases in diesel costs may cause short-term inflation to rise.

The extent to which the U.S. involvement in Venezuela affects diesel markets primarily hinges on the progression of the conflict.

Supporters of the intervention believe that oil production in Venezuela might increase, leading to a decrease in prices. Indeed,some studiesdiscover that Venezuela’s oil output might increase significantly, under very favorable circumstances.

Commodities Corner (December 2025): A shift in leadership in Venezuela might lead to an increase in oil output — but not by as much as expected.

Nevertheless, a swift and simple campaign appears very unlikely: The remnants of the Maduro regime havestruck a defiant tone, for now, while the role of Cuban intelligencedisincentivizeselite departures. Although nothing can be excluded — including the chance that U.S. forces might remain in Venezuela’s oil regions for an extended period — output is not expected to increase significantly in the short term.

In a slightly more believable (though still improbable) situation, conflicts might decrease after a few months, particularly if the Trump administrationcuts a dealWith Maduro’s vice president and potential successor, Delcy Rodríguez. Global oil prices could stay stable as diesel profit margins—defined as the gap between crude oil’s market price and the wholesale cost of diesel—remain above $40 per barrel, leading to a U.S. national retail diesel price increase of less than 5%—approximately 15 cents per gallon.

In the most probable large-scale intervention scenario, however, the regime will not collapse and will instead carry out a“guerrilla-style resistance.”The dispute might not only involve Venezuela but alsoescalate to Colombia through actors who support Maduro, such as the ELN terrorist organization.

In this very realistic situation, oil prices might increase by$5 to $8 per barrel(or approximately 9% to 14%). At the same time, the diesel crack spread might go up to $50 to $60 per barrel, which would mean a domestic diesel retail price of roughly $4.15 to $4.50 per gallon, or 15% to 25% more than current prices of$3.60 a gallonduring the week ending December 15

Significantly, Dallas Fed researchersidentify price fluctuations in diesel may cause short-term inflation to rise, primarily through goods that require extensive transportation, such asagriculture, although the extent and longevity depend on length and transmission.

Diesel costs were already set to increase prior to the attack. U.S. overall distillate stockpiles are expected to conclude the year atmultiyear lows; diesel price differentials have increased in the past few months, according to theenergy consultancy RBN; and the International Energy Agency haswarnedthat global middle distillate markets are currently facing a supply shortage.

Notably, the commodity company KplernotesThat the intricate U.S. Gulf Coast refineries are already inherently lacking in heavier feedstocks, particularly as imports from Mexico have decreased since the expansion of the Dos Bocas refinery, while the opening of the TMX pipeline on Canada’s west coast enabled Albertan exporters to reach Pacific refiners. U.S. national retail diesel prices are expected to rise further along this path.

Where the effect might be most severe

Trucking positions form the biggest segment within the transportation sector in the U.S., and are mainly found in rural areas.

The United States Energy Information Administrationreportsthat the consumption of national distillate fuel oil is mainly found in the transportation sector. Trucking positions make up thelargestsubdivision within the transportation sector in the United States that is largely located in rural areas. TheAmerican Trucking Associationstates that over 3.5 million professional truck drivers are working in the industry. Approximately24%of truck drivers came from rural areas in 2017, as reported by the U.S. Census Bureau, while rural areas made up only20%of the entire U.S. population in 2020.

Additionally, 48%Most of the truck vehicle miles traveled (VMT) took place in rural regions. A rise in diesel costs due to a conflict in Venezuela would consequently affect the transportation industry — particularly in rural parts of America.

The American trucking industry is already facing a“freight recession,”as stated by the American Transportation Research Institute (ATRI), it would therefore be significantly affected by a rise in diesel prices. ATRI’s2025 surveyof trucking operational expenses revealed that marginal costs amounted to $2.26 per mile, with fuel accounting for 48 cents per mile of this total. Across the country, Class 8 trucks’fuel economyaverages only 6.85 miles per gallon — so even minor rises in diesel costs can affect the financial performance of operators, particularly those in rural areas that often travel greater distances.

A widespread military operation in Venezuela would affect certain U.S. states more significantly than others. The states that are most reliant on distillation processes tend to be geographically vast, with extensive rural regions; they also have significant extractive industrial sectors; and they face challenges related to…winter weather and high crosswinds or hilly terrainthat reduce trucking fuel efficiency; and/or encounter cold winters requiring residential or commercial heating using diesel.

Instead of trying to “run the country”and trying to carry out a dangerous, extensive military operation in Venezuela that might create financial worries for U.S. citizens, the Trump administration ought to think aboutalternative, nonmilitary optionswhich might diminish the remaining power of the Maduro government and ease migration flows throughout the Americas.

Alternatively, if fuel costs surge because of significant, long-term disruptions in Latin America, U.S. states and rural regions that depend heavily on diesel will experience the greatest financial impact.

Joseph Webster serves as a senior fellow within the Atlantic Council’s Global Energy Center and the Indo-Pacific Security Initiative. He also oversees the independentChina-Russia Report. This piece reflects his individual opinions.

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