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The Energy Report

Phil Flynn
http://www.pricegroup.com/
pflynn@pricegroup.com


Blockade. The Energy Report 12/17/2025

Oil prices are rebounding from a five-year settlement low on news that the United States is going to ramp up the pressure on Venezuelan dictator Nicolás Maduro, putting on the first blockade in our hemisphere since the Cuban Missile Crisis. This blockade of Venezuelan oil tankers and increased pressure on President Nicolás Maduro are only part of rally as reports say that the US is preparing new sanctions on Russia should it reject current ceasefire proposals.

The “total and complete blockade” on oil tankers under U.S. sanction entering or leaving Venezuela could be not only a game changer for the oil market but may be the catalyst that get Maduro to leave assuming his drug dealing buddy’s will let him. U.S. naval forces, including aircraft carriers and destroyers, are intercepting targeted vessels in the Caribbean to enforce sanctions after seizing a sanctioned tanker near Venezuela’s coast and the odds that that will continue will strangle Venezuela oil trade and drug trade. Poor Maduro.

President Trump isn’t holding back either as he doubles down to bring the Russian-Ukraine war to an end. Reports from Bloomberg News suggest the U.S. is stepping up its game, lining up a new wave of sanctions aimed squarely at Russia’s energy sector.

The word is, if Putin decides to reject the peace deal on the table, Washington is ready to strike by going after Russia’s shadow fleet—the ghost tankers quietly shuffling Moscow’s oil around the globe. And it’s not just the ships; the U.S. has its sights set on the traders helping to grease these secret deals, according to sources familiar with the White House’s latest moves. So, while the oil market is already feeling the heat from the Venezuelan crackdown, don’t count out even bigger moves coming if Russia doesn’t play ball.

Obviously where we have seen the impact from sanctions on Russia and Venezuela is on that heavy oil of course the heavy oil is the type of oil that our US refiners we’re built to refine and Venezuela of course used to be a major feedstock for the US refineries at one time giving the US almost 20% of our daily needs. And if you were a diesel crack spread that’s surged as global supplies of diesel were below average in the surging crack spread was the signal that the refiners needed to get to work. So the diesel cracks had surge and sold off but it may be time to see that spreads start to go up as the pressure on these heavy oil producers rises.

In mid-November 2025, the NY Harbor ULSD crack spread reached levels between $49 and $53 per barrel (specifically, $49.12/bbl on November 18 and peaking at $52.71/bbl soon after), marking the highest values observed since late 2023 or early 2024. Earlier in October 2025, the spread remained below $23/bbl before more than doubling due to supply disruptions.

Regional benchmarks, such as the Gulf Coast ULSD crack, were recorded in the range of $18 to $52/bbl during late 2025; however, NY Harbor, serving as the primary benchmark, exhibited notably higher rates during this peak period.

By mid-December 2025, crack spreads had moderated from the highs seen in November, reflecting broader oil market trends, which included record levels of global demand alongside persistent supply concerns. Intraday values as of December 17 varied according to futures settlements on NYMEX/CME, but overall, the trend continued to favor refiners when compared to historical averages.

Diesel crack spreads declined as temperatures rose. Natural gas prices also dropped with the warm weather, though forecasts now suggest a return to colder conditions, which could boost heating demand. U.S. LNG exports remain strong, with recent record shipments reducing domestic supply and supporting prices. Additionally, early December’s unexpected cold led to higher-than-expected storage withdrawals, tightening the supply outlook according to recent EIA reports.

Fox Weather reports that a massive storm is moving quickly across the country, bringing hurricane-force winds and affecting over 30 states by week’s end. A polar vortex has brought dangerous Arctic air to nearly two dozen eastern states. The storm is leaving the Pacific Northwest, where heavy rain worsened recent flooding in Washington, and heading to the Northern Plains and Rockies with wind gusts up to 70 mph. These strong winds have intensified power outages caused by flooding in Washington early Wednesday.

That’s why you need to download the Fox Weather ap! Als stay tuned to the Fox Business Network . Call me ay 888-264-5665 or email me at pflynn@pricegroup.com



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Phil is one of the world's leading energy market analysts, providing individual investors, professional traders and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline and energy markets. Phil's market commentary, fundamental and technical analysis, and long-term forecasts are sought by industry executives, investors and media worldwide.

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Contact Phil at 1-888-264-5665 or pflynn@pricegroup.com.