By Marianna Parraga and Shariq Khan
HOUSTON/NEW YORK, Feb 3 (Reuters) – Oil refiners on the U.S. Gulf Coast are struggling to soak up a speedy surge in Venezuelan crude shipments since final month’s flagship $2 billion provide deal between Caracas and Washington, pressuring costs and leaving some volumes unsold, based on merchants and transport knowledge.
The tender U.S. demand represents an early impediment for President Donald Trump’s hopes of sending nearly all of the South American nation’s oil to the US since U.S. forces captured Venezuela’s President Nicolas Maduro final month in a raid in Caracas.
Buying and selling homes Vitol and Trafigura had been granted U.S. licenses to market and promote thousands and thousands of barrels of Venezuelan oil following the U.S. operation and a subsequent provide settlement with interim President Delcy Rodriguez.
The buying and selling homes, which joined vitality main Chevron in holding approval to export Venezuelan oil, struck a number of early offers to promote some cargoes to refiners within the U.S. and Europe. Nevertheless, with Chevron additionally elevating exports shortly, the buying and selling corporations are actually discovering it more durable to safe sufficient patrons amongst Gulf Coast refiners, merchants mentioned.
“We’re all dealing with this concern the place there’s extra to put and never sufficient takers,” one of many merchants mentioned, citing reluctance from U.S. refiners to purchase Venezuelan crude. Some refiners are complaining that costs, albeit declining, stay excessive in comparison with competing Canadian heavy grades.
Venezuelan heavy oil cargoes for supply on the Gulf Coast are being supplied at about $9.50 per barrel under benchmark Brent, versus reductions of between $6 and $7.50 per barrel in mid-January.
Final month, complete Venezuelan oil exports to the U.S. virtually tripled to 284,000 barrels per day (bpd), based on knowledge primarily based on tanker actions.
The U.S. was absorbing some 500,000 bpd of Venezuelan oil earlier than Washington imposed sanctions on the nation in 2019. However exports to the U.S. went to zero in mid-2025 after Trump revoked all licenses to commerce and ship.
Reaching the U.S. refiners’ most capability once more would require time, one of many merchants mentioned, partially as a result of some amenities would require changes to course of heavier oil.
The chief government of refiner Phillips 66, Mark Lashier, mentioned on Tuesday the corporate can course of round 250,000 bpd of Venezuelan crude, however costs have to be aggressive for Venezuelan grades to displace different sources of heavy oil.
Chevron and Trafigura declined to remark. Venezuela’s state oil agency PDVSA and Vitol didn’t reply to requests for remark.
INCREASED COMPETITION
Chevron, whose present Venezuela license authorizes it to export to the U.S. solely, elevated exports to 220,000 bpd in January from 99,000 bpd in December.
Chevron CEO Mike Wirth instructed buyers on Friday that the corporate’s refining community can course of as much as 150,000 bpd of Venezuela’s heavy grades, which suggests it should retailer or market the remaining portion amongst different refiners.
The agency, which is the one U.S. oil main working in Venezuela, is producing some 250,000 bpd there. Wirth mentioned the corporate sees potential for a 50% output enhance over the subsequent 18 to 24 months, supplied the U.S. authorizes it to broaden operations.
Vessel monitoring knowledge this week confirmed a number of Chevron-chartered tankers loaded with Venezuelan crude ready for days to discharge at U.S. ports or slowing down navigation.
An individual conversant in Chevron’s operations mentioned the corporate needed to negotiate new discharge dates with prospects after a U.S. blockade on Venezuela induced transport delays between December and January. However all cargoes had been bought earlier than departure, the individual added.
In the meantime, Vitol and Trafigura exported some 12 million barrels – equal to round 392,000 bpd – from Venezuelan ports in January, principally to storage terminals within the Caribbean, the information confirmed.
A lot of it has not but been bought, sources mentioned.
Complete Venezuelan oil exports bounced to close 800,000 bpd final month, from 498,000 bpd in December.
China was beforehand the highest vacation spot for Venezuelan oil, however none has been despatched there since Maduro’s seize in early January, based on the information. The U.S. mentioned after seizing Maduro that it might management Venezuela’s oil gross sales indefinitely.
Whereas China is allowed to buy the oil, it should not be at “unfair, undercut” costs at which Caracas bought the crude beforehand, a U.S. official mentioned final month.
Beijing has rejected the U.S. takeover of Venezuela’s oil exports.
China’s state-owned PetroChina, beforehand the biggest receiver of Venezuelan crude, has instructed merchants to not purchase or commerce Venezuelan oil whereas it assesses the state of affairs, separate sources instructed Reuters final week.
A possible aid valve for the Venezuelan oil might come from India.
On Monday, Trump introduced a commerce cope with India that slashes U.S. tariffs on Indian items in alternate for India decreasing commerce limitations, stopping its purchases of Russian oil and shopping for oil as an alternative from the U.S. and doubtlessly Venezuela.
India’s Reliance Industries final month mentioned it was contemplating importing Venezuelan oil.
(Reporting by Marianna Parraga in Houston and Shariq Khan in New York; further reporting by Georgina McCartney and Sheila Dang; Modifying by Rosalba O’Brien)
