Dear Reader,
Last week, the United States government took a 35% equity stake in 65 billion barrels of Venezuelan crude oil.
The deal cost American taxpayers exactly zero dollars.
The Pentagon's Office of Strategic Capital now owns a piece of NABEP, a private energy company with 100-year concessions to 17 Venezuelan oil fields. Brent crude sits above $100 a barrel. U.S. LNG exports are up 23% year over year. Domestic gas production just hit a record 111.7 billion cubic feet per day.
Washington just did what B-quadrant investors have always done. They positioned for the toll.
Inside today's issue:
- THE BARREL: The deal that would make Venezuela the second-largest oil reserve holder in the world, and what it means when governments start acting like investors.
- THE GRID: U.S. gas production just broke its own record. The infrastructure moving that gas is quietly becoming the most important real asset in America.
- THE POLICY DESK: The 10% global tariff lands today. Bond markets are pricing a September rate hike. Energy inflation is running at 14.7%. Who holds the pricing power.
- The last energy revolution made investors rich. The next one is already underway.
THE BARREL
Brent crude crossed $105 a barrel this week. That is 55% above where it traded a year ago.
The Venezuela deal is the biggest story in energy that nobody is framing correctly. NABEP, a privately held U.S. company, just received 100-year concessions on 17 Venezuelan oil fields holding approximately 65 billion barrels of proven reserves. For context, the U.S. currently holds about 46 billion barrels in total domestic proven reserves. This single deal more than doubles that number.
In exchange, NABEP handed the Pentagon's Office of Strategic Capital a 35% equity stake. Zero cost to taxpayers. The White House is calling it "the biggest oil deal in world history." They are not wrong on the numbers.
NABEP plans to invest $100 billion in new oil infrastructure over the life of the deal. Venezuela receives $200 billion in royalties and taxes over the first 25 years. The U.S. government receives dividends from a 35% equity position it got for free.
Think about what that structure is. It is not an oil subsidy. It is not a loan. It is an equity stake in a hard asset cash flow machine. My rich dad would have recognized that immediately.
THE GRID
U.S. dry natural gas production hit 111.7 billion cubic feet per day in 2026, according to the EIA's September Short-Term Energy Outlook. That is a new record, up from 107.6 bcfd in 2025.
Two regions are driving it. The Permian Basin is up 6%. The Haynesville Shale in Louisiana is up 9%. At 10,500 to 13,500 feet, the Haynesville ranks among the deepest shale plays in America. It also sits right next door to the Gulf Coast LNG export terminals.
LNG exports averaged 17.4 bcfd in the first half of 2026, up 23% from the same period last year. Golden Pass LNG, the QatarEnergy and ExxonMobil joint venture near Port Arthur, shipped its first cargo this spring, adding 0.4 bcfd of new export capacity. More terminals follow into 2027.
Gas inventories are running 5% above the five-year average entering winter. Henry Hub sits near $2.91 per MMBtu. Production is up. Exports are up. The infrastructure carrying all of it is at full capacity.
THE POLICY DESK
The 10% global tariff took effect today. Every imported good now carries a new floor cost. Canada has responded with $20 billion in retaliatory tariffs on 700 U.S. products, effective September 8. India faces an effective 18.3% combined duty rate.
The bond market is not waiting around. The 10-year Treasury yield sits at 4.78%, up 71 basis points year over year. CME FedWatch is now pricing a 60% probability of a September rate hike, up from 35% just days ago. The market is telling the Fed something the Fed is not saying out loud: inflation is not over.
Energy inflation is running at 14.7%. Diesel hit a record $5.94 per gallon this week. Every business that moves goods pays that price. Every farm. Every trucking company. Every food distributor. This is the hidden tariff nobody voted on.
There is one number in this that ties all three stories together. The Venezuela deal, the record gas production, the tariff shock, the bond market alarm. They all point to the same place.
But first — our friend Porter Stansberry has been tracking something that connects directly to this story. Take a look:
SPONSORED: PORTER & CO
THE INVESTOR ANGLE
The number that ties everything together is the infrastructure that moves the energy.
Record gas production needs pipelines to carry it. Record LNG exports need terminals to liquify it. 65 billion barrels of Venezuelan crude needs wells, pumps, processing facilities, and tanker routes. The commodity price goes up and down. The infrastructure collects a toll either way.
The Venezuela deal tells you something important. When the U.S. government structures a deal, they do not take a share of the oil price. They take equity in the operating company. A 35% stake in cash flows, dividends, and asset appreciation. That is what the B-quadrant looks like. You own the machine that produces the oil, not a futures contract on the oil itself.
The tariff environment makes domestic energy infrastructure more valuable, not less. If imported goods cost more, the premium on homegrown supply goes up. If the Fed raises rates in September, hard assets with real cash flow become the one thing a rising rate environment does not punish.
The Haynesville is sitting next to the Gulf Coast LNG terminals. Those terminals are running at capacity. The companies that own the pipelines feeding those terminals collect a fee on every cubic foot, regardless of whether gas trades at $2.50 or $5.00.
That is the toll. That is the play.
Chris Carroll
Publisher, Money, Power and Profit
P.S. The book Hedge Fund Market Wizards profiles some of the greatest traders alive. And our friend Larry Benedict has his own chapter. Now this former hedge fund manager is turning to oil, and he says the market conditions forming right now are some of the best he has seen in 40 years. Watch the free presentation here.