Valero Energy announced that it has purchased Venezuelan crude oil from three sellers authorized by the US government, in a move that highlights the return of Venezuela as a source of heavy crude for US refineries. This operation is part of the change in export policies to the South American country following recent political and economic developments.
The company indicated that it expects Venezuelan crude to make up a significant portion of the heavy crude diet at its refineries in February and March, although it did not disclose the names of the suppliers involved in the transaction. The focus on this type of crude reflects the usefulness of these heavier grades to optimize complex refinery operations.
The company processed up to 240,000 barrels per day of heavy crude in its refining system prior to an expansion at its 435,000 bpd refinery in Port Arthur, Texas, in 2023, which substantially increased its capacity to process this type of crude, said Randy Hawkins, vice president of supply and marketing.
Importance for the heavy crude oil diet
The crude oil exported from the Caribbean country is characterized by its density and high sulfur content, which places it within the heavy grades that require complex refining units for processing. Valero, with a strengthened processing capacity, is well positioned to integrate this supply, surpassing past levels.
This integration allows the company to partially substitute other more expensive or less efficient crudes for certain processes, which could improve refining margins in times of volatility in global energy markets. The Venezuelan heavy crude blend may offer competitive advantages over alternative sources, especially if price differentials favor its acquisition.
Expectations for the U.S. energy market.
Valero’s decision is part of a broader movement where U.S. refiners are capitalizing on the growing availability of Venezuelan crude as negotiations tighten. In addition to Valero, other companies such as Phillips 66 have also purchased cargoes of Venezuelan crude under similar agreements that allow for up to 50 million barrels in exports to the U.S. market.
Analysts point out that this return will not only have an impact on physical supplies, but also on price dynamics and competition between global heavy crudes. For example, countries such as Canada have been major suppliers of heavy crude, but the return of Venezuelan crude could adjust trade flows and benchmark differentials in the short and medium term.
Commercial and geopolitical strategies
The incorporation of Venezuelan crude into the refining diet of companies such as Valero not only has commercial and industrial dimensions, but also geopolitical ones. The return of Venezuelan oil to the U.S. market is part of a context of negotiations between governments and energy strategies that seek to stabilize markets and reconfigure traditional alliances.
In addition, the move could stimulate further international investment in Venezuela if conditions favoring a continued flow of trade are consolidated, creating incentives for other global players to participate in its oil sector. This could have an impact on production, exports and crude oil price dynamics in the coming quarters.
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