Inflation report to be released as Iran war sends gas prices surging

(NEW YORK) — President Donald Trump has repeatedly touted the opportunity for U.S. companies to extract and sell oil from Venezuela, which holds the largest oil reserves in the world.

“We’re going to be taking out a tremendous amount of wealth out of the ground,” Trump said on Saturday, just hours after a U.S. military attack removed Venezuela President Nicolas Maduro.

Venezuelan oil, however, will likely provide little relief for gas prices paid by Americans over the coming months, analysts told ABC News. They cited the relatively small amount of oil at stake in the near term and the glut of crude already flooding global markets.

A more substantial amount of oil could be accessed over the coming years, leading to a potentially noticeable decline in prices at the pump, they added. But that outcome remains uncertain, since oil companies face significant political and logistical hurdles in Venezuela, while wider market conditions could shift in the meantime.

“I would not expect to see a sharp drop because of this event,” Richard Joswick, head of near-term oil analysis at S&P Global Commodity Insights, told ABC News.

Oil executives are set to meet with President Donald Trump at the White House on Friday to discuss investments in Venezuela, a White House official confirmed to ABC News.

Venezuela boasts the biggest proven oil reserve of any country, amounting to roughly 303 billion barrels or about 17% of the world’s reserves, according to the U.S. Energy Information Administration, or EIA, a federal agency.

For decades, however, the nation has struggled to match those holdings with similarly stratospheric output due to lackluster infrastructure and government mismanagement.

Venezuela exported about 749,000 barrels per day last year, totaling less than 1% of global supply, according to data and analytics company Kpler.

In a social media post on Tuesday, Trump said Venezuela would hand over 30 to 50 million barrels of oil to the U.S., which in turn would sell them at their market price. The resulting funds — as much as $2.8 billion at current prices — will “benefit the people of Venezuela and the United States,” Trump said.

Trump has not provided details about the timing of such sales.

The plan proposed Tuesday would likely have little or no effect on U.S. gasoline prices, analysts told ABC News. The amount of oil stipulated by Trump is relatively small, making up the equivalent of between one-third and half of the oil consumed worldwide in a single day, according to data compiled by the EIA.

“Short term, I don’t think we’ll see much of an impact,” Tucker Balch, a finance professor at Emory University, told ABC News. “It’s not a lot of oil right now.”

Even more, oil prices are hovering near their lowest levels since 2021, meaning it will prove difficult to bring prices down further anytime soon, analysts added. Low oil prices stem from a glut of oil alongside relatively slow global economic growth, which has constricted demand for fossil fuels.

“There’s an oversupply and weak demand. More crude won’t make a big difference in the overall price,” Ramanan Krishnamoorti, a professor of petroleum engineering at the University of Houston, told ABC News.

After the military operation, Trump outlined a long-term role for U.S. oil companies in Venezuela, saying the firms would spend money to improve the nation’s infrastructure and output.

“We’re going to have our very large United States oil companies — the biggest anywhere in the world — go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure,” Trump said during a press conference on Saturday at his Mar-a-Lago residence in Palm Beach, Florida.

A U.S.-led effort to extract and sell the massive Venezuelan oil reserves could inject a substantial amount of oil into global markets and noticeably reduce gasoline prices, some analysts said.

Venezuelan oil production topped out at 3.5 million barrels per day in the 1990s, Kpler said. A return to that output would amount to about 4% of global oil supply, S&P’s Joswick, adding that the influx could push down gasoline prices.

“Prices are set on the margin and small imbalances in volume can lead to large shifts in prices,” Joswick said.

A long-term venture would encounter challenges, however, some analysts said.

The infrastructure necessary to ramp up oil production would require tens of billions of dollars of investment over several years, while oil companies involved in the effort would face political risks, according to analysts.

Chevron is currently the only U.S. oil firm operating in Venezuela, as part of a joint venture with the country’s state-owned oil outfit.

ExxonMobil and ConocoPhillips stopped doing business in Venezuela in 2007, after former President Hugo Chavez nationalized the sector. Citing the unlawful seizure of assets belonging to the two oil giants, the World Bank’s International Center for Settlement of Investment ordered Venezuela to pay the firms billions of dollars. Venezuela has only paid a small share of the debt it owes to ExxonMobil and ConocoPhillips.

The policy approach in Venezuela is uncertain over the coming years, while the same goes for the U.S. as a presidential election approaches in 2028, Krishnamoorti said.

“It’s unlikely the oil companies are going to take the bait to go after some significantly difficult oil to produce in a very uncertain U.S. policy and global policy situation,” Krishnamoorti added.

Joswick noted, however, that possible success in accessing Venezuelan oil over the next few years could be a “big incentive for the continuation of similar policies.”

While touting potential U.S. oil interests in Venezuela, the Trump administration has described the operation as a law enforcement function rather than a military attack.

Maduro and his wife, Cilia Flores, are among six defendants named in a four-count superseding indictment that accused them of conspiring with violent, dangerous drug traffickers for the last 25 years. Maduro was indicted on related charges in 2020. He has long denied all the allegations, and he pleaded not guilty on Monday. Flores also pleaded not guilty.

So far, the major oil firms have yet to speak publicly about Trump’s plans.

In a previous statement to ABC News, ConocoPhillips said the firm is keeping tabs on the ongoing situation.

“ConocoPhillips is monitoring developments in Venezuela and their potential implications for global energy supply and stability. It would be premature to speculate on any future business activities or investments,” the company said.

Chevron said it continues to focus on its current operations.

“Chevron remains focused on the safety and wellbeing of our employees, as well as the integrity of our assets. We continue to operate in full compliance with all relevant laws and regulations,” it said in a statement.

ExxonMobil did not respond to a request for comment.

ABC News’ Mary Bruce contributed to this report.

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(NEW YORK) — Inflation held steady in February, maintaining price increases at elevated levels in the weeks before the U.S.-Israeli war with Iran sent gasoline prices surging and stoked heightened concern about affordability. The reading matched economists’ expectations.

Prices rose 2.4% in February compared to a year earlier, leaving the inflation rate unchanged from January, U.S. Bureau of Labor Statistics data showed. Inflation stands slightly higher than the Federal Reserve’s target rate of 2%.

Oil prices have surged since the war with Iran late last month, ratcheting up costs for gasoline and airfare, and threatening to push up prices for a vast array of goods reliant on diesel-fuel transport, some analysts previously told ABC News.

Fuel prices rose in February as traders anticipated the possible outbreak of war with Iran, government data showed. Gasoline prices climbed more than 3% in February from a month earlier, according to the inflation report.

Food prices climbed 3.1% in February compared to a year earlier, registering above overall inflation and maintaining their pace from the previous month.

A lackluster jobs report last week showed the U.S. economy lost 92,000 jobs in February, which marked a reversal of fortunes for the labor market and erased most of the job gains recorded in 2026.

The unemployment rate ticked up from 4.3% in January to 4.4% in February, the BLS said. Unemployment remains low by historical standards.

Sluggish hiring has coincided with elevated inflation, threatening a period of “stagflation.”

Those economic headwinds helped set the conditions before the outbreak of war with Iran, which spiked oil prices and risked price increases for a host of diesel-fuel transported goods.

U.S. crude oil prices hovered at about $86 per barrel on Tuesday, surging more than 30% since a month earlier.

The average price of a gallon of gasoline in the U.S. soared to $3.53 on Tuesday from $2.92 a month prior, AAA data showed.

Still, the overall economic picture remains mixed.

A government report in February on gross domestic product (GDP) showed the economy grew at a tepid annualized pace of 1.4% over the final three months of 2025. That reading indicated a dramatic cooldown from the strong annualized growth of 4.4% recorded in the previous quarter, U.S. Commerce Department data showed.

The Iran war threatens to slow U.S. economic growth since oil-driven price increases could weigh on consumers and businesses, analysts previously told ABC News.

The potential combination of higher inflation and slower growth could also pose a challenge for the Fed, putting pressure on both sides of its dual mandate to manage prices and maintain maximum employment.

If the Fed opts to lower borrowing costs, it could spur growth but risk higher inflation. On the other hand, the choice to raise interest rates may slow price increases but risks a cooldown of economic performance.

The central bank held interest rates steady at its most recent meeting in January, ending a string of three consecutive quarter-point rate cuts. Policymakers will make their next interest-rate decision on March 18.

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(NEW YORK) — Mortgage rates this week fell to their lowest level in 15 months, easing borrowing costs for homebuyers eager for a thaw in the housing market in 2026.

The average interest rate on a 30-year fixed mortgage stands at 6.15%, plummeting from a level of 6.89% in May, data from financial services company Freddie Mac showed. Last January, the average 30-year fixed mortgage rate exceeded 7%.

Each percentage point decrease in a mortgage rate can save thousands or tens of thousands in additional cost each year, depending on the price of the house, according to lender Rocket Mortgage.

Sam Khater, the chief economist at Freddie Mac, called the drop in mortgage rates an “encouraging sign for potential homebuyers heading into the new year.”

Mortgage rates closely track the yield on a 10-year Treasury bond, or the amount paid to a bondholder annually. Bond yields are shaped in part by expectations of the benchmark interest rate set by the Federal Reserve.

The sharp drop in mortgage rates over the latter half of 2025 owed in part to data showing a slowdown in hiring, which heightened expectations that the Fed would slash interest rates in an effort to boost the ailing labor market.

Starting in September, the Fed cut interest rates at three consecutive meetings, bringing the benchmark rate to a level between 3.5% and 3.75%. That figure marks a significant drop from a recent peak attained in 2023, but borrowing costs remain well above a 0% rate established at the outset of the COVID-19 pandemic.

After the Fed’s most recent rate cut in December, Fed Chair Jerome Powell suggested the central bank may be cautious about further rate reductions.

“We’re well positioned to wait and see how the economy evolves,” Powell said.

The housing market is suffering from a phenomenon known as the “lock in” effect, some experts previously told ABC News.

While mortgage rates have fallen, they remain well above the rates enjoyed by most current homeowners, who may be reluctant to put their homes on the market and risk a much higher rate on their next mortgage.

In turn, the market could continue to suffer from a lack of supply, making options limited and prices sticky.

Mixed results in recent economic data have clouded the outlook for the economy — and in turn, interest rates.

A jobs report released two weeks ago showed sluggish hiring and an uptick in the unemployment rate. Unemployment remains low by historical standards but has inched up to its highest level in years.

Days later, a report on gross domestic product defied concerns stoked by the hiring slowdown. The U.S. economy grew at a robust annualized rate of 4.3% in the third quarter in the government’s initial estimate, marking an acceleration from 3.8% growth recorded in the previous quarter, U.S. Commerce Department data showed.

Futures markets expect two quarter-point interest rate cuts next year, forecasting the first in April and a second in the fall, according to CME FedWatch Tool, a measure of market sentiment.

Redfin, a Seattle, Washington-based real estate giant, forecasts average 30-year fixed mortgage rates will remain in the low 6% range for most of 2026.

“Mortgage rates will continue their slow slide but remain high relative to the pandemic era,” Redfin said last month.

“Lingering inflation risk and the likelihood that we’ll avoid a recession will keep the Fed from cutting more than the markets have already priced in. That’s why rates may dip below 6% occasionally, but not for any meaningful period,” Redfin added.

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