Oil refinery, Ashland, Kentucky. Photo: Jeffrey St. Clair.

As the Houthis seize the Red Sea coast of Yemen, with the apparent help of Iranian advisors and little effective resistance from the officially recognized government, the price of oil briefly spiked again to over $100 a barrel. Diesel fuel remains at record highs due to a lack of refinery capacity. This was in addition to a series of drone attacks, coming from Iraq, on the East-West Pipeline that has been increasingly used since the war began to take the pressure off the blocked Strait of Hormuz. Saudi Aramco was able to restart the pipeline after roughly 10 days but getting the pipeline back to normal capacity could take a couple of months. Meanwhile, getting oil through the Strait via shuttle escort is actually now the better option- though pricey given high insurance costs and the need to compensate the tanker crews for the risky trip.

On the other side of the world, the details of the Trump administration’s oil deal with Venezuela remain murky. Something about “100-year concessions for 17 oil fields with proven reserves of approximately 65 billion barrels” that the Venezuelan government (supposedly an interim government) will grant a company called North American Blue Energy Partners (NABEP) that didn’t even exist until two years ago. NABEP would have a joint venture with the U.S. government where the government would take a 35 percent equity stake and buy 20 percent of production at cost (meaning at the cost of production, cheaper than market cost) and have the right of first refusal for the other 80 percent.

Questions abound. The U.S. equity stake is to fall under the Pentagon’s Office of Strategic Capital (established under the Biden administration) whose statute says it doesn’t take........

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