U.S. Refiners Struggle to Absorb Sudden Surge in Venezuelan Oil Imports

  • Oil refiners in the United States (U.S.) Gulf Coast are struggling to absorb a rapid surge in Venezuelan crude shipments since last month's flagship US$2Bn supply deal between Caracas and Washington, pressuring prices and leaving some volumes unsold, according to traders and shipping data.
  • The soft U.S. demand represents an early obstacle for President Donald Trump's hopes of sending the majority of the South American country's oil to the United States since U.S. forces captured Venezuela's President Nicolas Maduro last month in a raid in Caracas.
  • Trading houses Vitol and Trafigura were granted U.S. licenses to market and sell millions of barrels of Venezuelan oil following the U.S. operation and a subsequent supply agreement with interim President Delcy Rodriguez. The trading houses, which joined energy major Chevron in holding approval to export Venezuelan oil, struck several early deals to sell some cargoes to refiners in the U.S. and Europe. However, with Chevron also raising exports quickly, the trading companies are now finding it harder to secure enough buyers among Gulf Coast refiners, traders expressed.
  • "We're all facing this issue where there's more to place and not enough takers," one of the traders said, citing reluctance from U.S. refiners to buy Venezuelan crude. Some refiners are complaining that prices, albeit declining, remain high compared to competing Canadian heavy grades. Venezuelan heavy oil cargoes for delivery at the Gulf Coast are being offered at about $9.50 per barrel below benchmark Brent, versus discounts of between $6 and $7.50 per barrel in mid-January.
  • Last month, total Venezuelan oil exports to the U.S. almost tripled to 284,000 barrels per day (bpd), according to data based on tanker movements. The U.S. was absorbing some 500,000 bpd of Venezuelan oil before Washington imposed sanctions on the country in 2019. But exports to the U.S. went to zero in mid-2025 after Trump revoked all licenses to trade and ship. Reaching the U.S. refiners' maximum capacity again will require time, one of the traders said, in part because some facilities would require adjustments to process heavier oil.

(Source: Reuters)