I know you probably don’t care about U.S. policy toward oil-producing states.
But it directly affects Biden’s reelection odds and how you invest this period.
Let’s start with what happened on October 18th, 2023.
With little fanfare, the Biden administration eased sanctions on Venezuela’s oil sector, which should allow the beleaguered socialist nation to export more oil to the U.S.
Now, you know Venezuela…
It’s one of the world’s wealthiest petrostates, with South America’s biggest reserve.
Sadly, Incompetent, Repressive Dictators and U.S. Sanctions Left It Pumping A Fraction Of Its Potential
As expected, The White House says the six-month “sanctions relief” is aimed at coaxing Venezuelan president Nicolás Maduro into holding free-ish elections next year. The new deal can be extended or canceled based on whether or not Maduro abides by the terms.
However, there’s good reason to think that the Biden administration cares more about the positive impact of additional oil supplies from Venezuela (lower pump prices during election season) than the prospect of democracy in the South American petrostate.
For context, Venezuela generates about 800,000 barrels of oil per day.
But, according to analyst estimates from S&P Global, the new U.S. “sanctions relief” deal could boost Venezuela’s output by 200,000 to 300,000 barrels of oil daily.
Much of that new oil could end up in the U.S. as refined gasoline and other products…
If supply and demand remained stable, more oil from Venezuela could ease upward pressure and reduce how much you pay at the pump (crucial during election season).
This explains why — despite the political risk — the Biden administration thought it was worth the trouble to coax more Venezuelan oil onto the U.S. market during this period.
“Higher prices could risk backlash from voters everywhere.” — ClearView.
Another thing:
Before Hamas attacked Israel on October 7th, the Biden administration had been quietly easing sanctions on Iran, allowing the Islamic theocracy to export more oil.
Same objective as above — increase oil supply to reduce prices at the pump.
However, It May Now Have to Reverse That Policy Because Iran Is Hamas’ Biggest Funder
There was also hope that Saudi Arabia might pump more in 2024 as part of a normalization agreement with Israel. But that deal now seems delayed and dead.
Hence, the Biden administration is more tolerant of Russian oil exports, even though Russia sells oil above the $60 price cap the U.S. and its allies imposed last December.
The bottom line:
Biden can only do so much to control oil and gasoline prices. (They could fall if global tensions in Ukraine and the Middle East unexpectedly ease with no fresh wars anytime soon. Or rise if the Israel-Gaza war expands into Iran or other major oil producers).
Pain at the pump will cause Biden pain at the polls, and he knows it. This explains Venezuela’s “sanctions relief” and more tolerance for Russian oil exports.
But no matter what happens at the polls, only you can change your financial situation to ensure you’re on track with your wealth-building goals regardless of market conditions.
So, while it’s okay to understand why certain things happen in this country…
I encourage you to double down on your money-making endeavors.
This way, no matter what happens in the months ahead, you’ll have enough to protect your family while taking advantage of little-known opportunities to grow your wealth.