The Venezuelan crude oil imports are gaining ground in the Gulf of Mexico and progressively displacing demand for high-viscosity fuel oil (HSFO) from Mexico. This shift reflects a new dynamic in U.S. coker plants, especially in USGC (U.S. Gulf Coast) refineries, where Venezuelan oil is beginning to play a key role as a feedstock.
Preference for Venezuelan crude oil in Gulf refineries
Recent easing of U.S. sanctions has facilitated the inflow of increasing volumes of heavy crude and sour from Venezuela. In January, imports increased to 9.2 million barrels, up from 6.4 million barrels in December, according to data from S&P Global Commodities at Sea.
This move has been supported by solid refining margins, with ULSD crack in the Gulf reaching $32.19/b, representing a gain of more than $2/b versus the recent average.
Direct impact on Mexican HSFO
As refineries process more Venezuelan crude oil Venezuelan crude oilAs the refineries process more Venezuelan crude oil, they generate greater volumes of residue for coking, thus reducing the need to import Mexican HSFO as feedstock.
While demand has not been completely eliminated, existing contracts are being redirected to the marine fuels market, increasing supply in that segment.
Reactivation in the marine bunker market
This surplus of Mexican fuel oil has begun to feed the physical offshore blending market. Since February 9, bidding activity has outpaced demand in the Platts Market on Close process, a sign of increased availability.
HSFO barge assessments have risen, but have also been mitigated by pressure from increased supply.
Implications for regional energy trade
This redirection of flows highlights how Venezuelan oil, after years of limitations, is once again becoming part of the energy scene in the Western Hemisphere.
For Mexico, it represents a temporary loss of prominence in a niche it had consolidated, while for marine fuel blenders it represents a temporary loss of prominence in a niche it had consolidated. marine fuel blendersFor marine fuel blenders, it opens a window of opportunity in the face of greater availabilities.
Competition for heavy residues intensifies, and the Gulf of Mexico is once again the scene of a strategic adjustment where geopolitics, refining margins and commercial decisions shape the direction of the market.
Source: S&P Global
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