MW How Trump's Venezuela raid could worsen America's affordability crisis
By Joseph Webster
A spike in diesel oil prices could make goods and materials more expensive to deliver - risking higher inflation
Diesel prices will likely rise as a result of the U.S. military strike on Venezuela.
An increase in diesel prices from a war in Venezuela would impact the trucking sector - especially in rural America.
U.S. forces arrested Nicolás Maduro, the former strongman of Venezuela, in a consequential raid in Caracas. The raid on Saturday is part of the "Trump Corollary" to the Monroe Doctrine of the 1820s. The U.S. is asserting itself across the Western Hemisphere and, Trump says, is even considering a plan to "run" Venezuela.
If the Trump administration follows through on this pledge to run Venezuela, it must be prepared to address the affordability issues for U.S. consumers and inflation risks for businesses and investors that will likely arise.
The impact on oil markets and prices is clearly a concern. But the U.S. intervention in Venezuela will likely have only a modest near-term impact on crude oil markets due to a potential global supply glut, significant spare production capacity, robust U.S. production and a well-stocked Strategic Petroleum Reserve.
Diesel markets, however, are another matter. Venezuela and other Latin American nations play a major role in setting global and U.S. diesel prices, as Venezuela and Colombia export heavier crude oil that is highly suitable for diesel.
Diesel prices will likely rise if the situation in Venezuela disrupts crude production and exports. Accordingly, energy and food prices for Americans could spike - as higher fuel costs are passed along to consumers from the diesel-intensive U.S. trucking sector, hitting rural areas especially hard.
U.S. Gulf Coast complex refineries are configured to process Venezuelan crude grades and in 2024, regional refinery runs totaled roughly 8.9 million barrels per day; imports from Colombia and Venezuela accounted for about 4% of these crude inputs. While those percentages may seem trivial, short-run diesel price inelasticity and refinery constraints imply materially higher regional prices, especially if substitutes are costly or slow to arrive.
Oil roiled
Diesel price shocks can push near-term inflation higher.
How deeply the U.S. intervention in Venezuela impacts diesel markets depends chiefly on how the conflict unfolds.
Intervention supporters hold that Venezuelan oil production could rise, sending prices lower. Indeed, some studies find that Venezuela's oil production could rise sharply, under highly supportive conditions.
Still, a quick and easy campaign seems highly improbable: The remnants of the Maduro regime have struck a defiant tone, for now, while the role of Cuban intelligence disincentivizes elite defections. While nothing can be ruled out - including the possibility that U.S. troops will occupy Venezuela's oil fields for years - production is unlikely to rise sharply in the near term.
In a somewhat more plausible (but still unlikely) scenario, tensions could ease after a few months, especially if the Trump administration cuts a deal with Maduro's successor, Delcy Rodríguez. Global crude prices might remain flat as diesel-crack spreads - the difference between the market price of crude oil and diesel's wholesale price - rest above $40 a barrel, sending U.S. national retail diesel prices up by less than 5% - or about 15 cents a gallon.
In the most likely large-scale intervention scenario, however, the regime will not fold and will instead conduct a "guerrilla-style resistance." The conflict could not only engulf Venezuela but also escalate to Colombia via Maduro-sympathetic actors, such as the ELN terrorist group.
In this highly plausible scenario, crude prices could rise by $5 to $8 a barrel (or about 9% to 14%). Meanwhile, the diesel-crack spread could reach $50 to $60/barrel, corresponding to a national diesel retail price of about $4.15 to $4.50 a gallon, or 15%-25% higher than prices of $3.60 a gallon in the week ended Dec. 15.
Significantly, Dallas Fed researchers find diesel price shocks can send near-term inflation higher, largely via freight-intensive goods, such as agriculture, although the magnitude and persistence depend on duration and pass-through.
Diesel prices were already primed to rise even before the raid. U.S. total distillate inventories are forecast to end the year at multi-year lows; diesel crack spreads have risen in recent months, according to the energy consultancy RBN, and the International Energy Agency has warned that global middle distillate markets are already supply-constrained.
Importantly, the commodity firm Kpler notes that complex U.S. Gulf Coast refineries are already structurally short of heavier feedstocks, especially as imports from Mexico have fallen since the ramp up of the Dos Bocas refinery, while the inauguration of the TMX pipeline on Canada's west coast allowed Albertan exporters to access Pacific refiners. U.S. national retail diesel prices will likely climb higher on the current trajectory.
Where the impact could hit hardest
Trucking jobs comprise the largest subsector in the transportation industry in the United States, and are disproportionately rural.
The U.S. Energy Information Administration reports that national distillate fuel oil consumption is overwhelmingly concentrated in the transportation industry. Trucking jobs comprise the largest subsector in the transportation industry in the United States, and are disproportionately rural. The American Trucking Association reports that more than 3.5 million professional truck drivers are employed in the sector. About 24% of truck drivers hailed from rural areas in 2017, according to the U.S. Census Bureau, while rural areas accounted for just 20% of the total U.S. population in 2020.
Additionally, 48% of truck Vehicle Miles Traveled (VMT) occurred in rural areas. An increase in diesel prices from a war in Venezuela would therefore impact the trucking sector - especially in rural America.
The U.S. trucking sector is already experiencing a "freight recession," according to the American Transportation Research Institute $(ATRI)$, and would therefore be particularly impacted by a jump in diesel prices. ATRI's 2025 survey of trucking operational costs found that marginal costs totaled $2.26 a mile, with fuel comprising 48 cents a mile. Nationwide, Class 8 trucks' fuel economy averages just 6.85 miles a gallon - so even small increases in diesel prices can impair operator profitability, especially for rural operators typically traversing longer distances.
A large-scale military intervention in Venezuela would impact some U.S. states more than others. The most distillate-intensive states tend to be geographically expansive with large rural areas; have large extractive industrial sectors; must contend with winter weather and high cross-winds or hilly terrain that worsen trucking fuel economy; and/or face cold winters that necessitate residential or commercial heating with diesel.
Instead of trying to "run the country" and attempting a risky, large-scale military intervention in Venezuela that could raise affordability concerns for Americans, the Trump administration should consider alternative, non-military options that could weaken the remnants of the Maduro regime and reduce migration pressures across the Americas.
Otherwise, if diesel prices spike due to major, sustained outages in Latin America, diesel-reliant U.S. states and rural areas will face the highest cost.
Joseph Webster is a senior fellow at the Atlantic Council's Global Energy Center and the Indo-Pacific Security Initiative; he also edits the independent China-Russia Report. This article represents his personal views.
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January 03, 2026 21:52 ET (02:52 GMT)
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