Venezuelan heavy crude is becoming increasingly relevant to the U.S. refining system amid global fuel constraints and high utilization rates at processing facilities. However, increasing supply from Venezuela does not depend solely on the availability of enormous reserves: restoring production requires drilling, well rehabilitation, infrastructure, diluents, and sufficient operational capacity to bring new barrels to market.
This relationship between production and refining helps explain why Venezuelan heavy crude has particularly attractive characteristics for complex U.S. Gulf Coast facilities and, at the same time, why increasing crude supply does not automatically translate into greater gasoline or diesel availability.
Venezuelan heavy crude fits Gulf Coast refineries
For decades, U.S. Gulf Coast refineries have developed configurations capable of processing heavy, high-sulfur crude oils from Venezuela, Mexico, and Canada. This capability is becoming increasingly relevant at a time when refining margins in the United States are reaching extraordinary levels due to international fuel constraints.
One of the key technologies within these facilities is delayed coking units, designed to convert residual fractions from heavy crude oils into higher-value products, including gasoline and diesel. This infrastructure distinguishes complex refineries from facilities configured primarily to process lighter feedstocks.
The expansion of U.S. shale significantly changed the availability of light crude in the country, but these grades produce a smaller proportion of residual components compared with Venezuelan grades such as Merey. For this reason, heavy barrels continue to play a specific role within certain refinery configurations.
Venezuela could maintain a predominantly heavy crude profile
The future composition of production reinforces this industrial relationship. Rystad Energy estimates that heavy and extra-heavy crude oils and bitumen could account for approximately three-quarters of Venezuelan production through 2028.
The Orinoco Oil Belt, which contains enormous extra-heavy hydrocarbon resources, could account for around 60% of national production during that period. This concentration also helps explain the growing interest in the region’s assets. Recently, Chevron strengthened its presence in Venezuelan heavy oil through a strategy aimed at expanding its participation in projects in the Orinoco Oil Belt.
Greater availability of Venezuelan heavy crude would provide U.S. refineries with another source of heavy feedstock and could increase competition with Canadian crude and other grades with similar characteristics.
However, transforming Venezuela’s geological potential into available supply requires overcoming significant operational challenges.
Higher production requires wells, infrastructure, and diluents
Venezuela currently produces around 1.25 million barrels per day, while new developments are targeting higher volumes. Reaching significantly higher levels will require additional drilling, extensive well workovers, infrastructure improvements, reliable access to diluents, and greater availability of drilling rigs, according to Rystad.
This challenge is part of a broader process. Inspenet recently analyzed how Venezuela’s oil production could grow through the development of 17 strategic fields, although converting available reserves into new barrels will depend on the recovery of wells, facilities, electricity, transportation, and export capacity.
Diluents are particularly important for extra-heavy crude oils because they help reduce viscosity and facilitate transportation and subsequent processing.
As these investments move forward, Venezuela already maintains a significant presence in U.S. crude supply. Venezuelan crude imports averaged 637,000 barrels per day during the four weeks ending August 21 and reached 662,000 bpd in the latest reported week. During that period, Venezuela was the second-largest crude supplier to the United States after Canada.
Refining capacity emerges as the next constraint
Having more crude available does not mean it can immediately be converted into more fuels. U.S. refinery utilization reached 97.4% during the week ending August 21, its highest level in nearly eight years, while crude inputs stood at around 17.4 million barrels per day.
Under these conditions, Venezuelan heavy crude can replace more expensive or less available heavy feedstocks and improve the economics of certain refineries. However, replacing one feedstock with another does not, by itself, increase physical processing capacity.
This constraint becomes even more significant amid international restrictions on refined products. Middle Eastern refinery processing stands at around 7.3 million bpd, compared with 9.9 million bpd before the disruptions that began in February. Kpler does not expect a full recovery to those levels before the second quarter of 2027.
The pressure is already being reflected in other downstream segments. The global diesel market is facing severe refining constraints, while elevated projected margins for the fuel underscore the growing importance of available capacity to transform crude into marketable products.
Strategic value extends across the entire value chain
The potential of Venezuelan heavy crude must therefore be analyzed from a perspective encompassing the entire value chain. Reserves represent the starting point, but converting them into additional supply requires upstream investment, facility rehabilitation, diluent availability, transportation, and processing capacity.
For complex Gulf Coast refineries, higher Venezuelan production could represent a growing source of feedstocks compatible with facilities specifically developed to process heavy crude oils.
The real industrial challenge will be to synchronize both ends of the chain: producing new barrels quickly enough while ensuring sufficient refining capacity to efficiently transform them into higher-value fuels.
