Released February 20, 2025 | SUGAR LAND
en
Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Though a special license allows for some Venezuelan crude oil to reach the United States, President Donald Trump said the country may be another target of his trade policies.
The U.S. refinery sector is dependent not on the light, sweet crude oil that comes from shale, but heavy, sour grades from the likes of Canada and Mexico, the top two oil exporters to the United States. Canada, with both its Cold Lake and Western Canadian Select classified as heavy, accounts for about 60% of total U.S. crude oil imports, or around 4 million barrels per day (BBL/d).
A looming tariff threat on North American trading partners could impact cross-border flows. Trump pledged a 25% tariff on goods imported from Mexico and a 10% tariff on Canadian energy, but opted to wait while those governments formulate their response.
The integrated nature of the North American midstream network means U.S. refiners would still have to take in Canadian and Mexican barrels, though there could be other heavy, sour options such as Ecuador with its Oriente blend or Venezuela with its Merey grade.
Trump said during an interview with Fox News on Tuesday, however, that his administration was weighing its options when considering Venezuelan crude.
"We're looking at that now," he said. "We're looking at the whole situation."
Over the four-week period ending February 7, Venezuela delivered an average of 294,000 BBL/d to U.S. markets, compared with 119,500 BBL/d over the same period last year.
U.S. supermajor Chevron Corporation (NYSE:CVX) (San Ramon, California) works in Venezuela through a joint venture with state-run Petróleos de Venezuela (PDVSA) (Caracas, Venezuela). It was granted a special export license in 2023, though then-President Joe Biden said he was taking the issue largely on a case-by-case basis. All of Chevron's exports from Venezuela head to the United States.
Venezuela's economy depends largely on hydroelectric power to keep the lights on, though the viscous nature of its crude oil means it needs a diluent to move it through pipelines to refineries or for exports.
About 80% of its natural gas, meanwhile, is associated with oil reserves, and it is sometimes reinjected into oil fields to stimulate production. Venezuela is largely void of the infrastructure necessary for gas storage.
Sanctions imposed in response to accusations of fraudulent elections under Venezuelan President Nicolas Maduro have left much of the nation's energy infrastructure in shambles. In November, PDVSA reported a fire at the operational center for the Soto Gas Pipeline in the eastern state of Monagas, considered something of a hub for the nation's energy sector given its proximity to the Orinoco oil belt.
Trump's protectionist trade policies, along with his willingness to upend decades of U.S. foreign policy, may push both friends and enemies away. China, the second-largest economy after the United States, has also looked to Venezuela to feed its downstream sector. A Reuters report from January found China took in 351,000 BBL/d on average from Venezuela last year, about 20% more than the United States.
Venezuela is a founding member of the Organization of the Petroleum Exporting Countries (OPEC). OPEC economists in their monthly market report for February put Venezuelan crude oil production at around 900,000 BBL/d.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The U.S. refinery sector is dependent not on the light, sweet crude oil that comes from shale, but heavy, sour grades from the likes of Canada and Mexico, the top two oil exporters to the United States. Canada, with both its Cold Lake and Western Canadian Select classified as heavy, accounts for about 60% of total U.S. crude oil imports, or around 4 million barrels per day (BBL/d).
A looming tariff threat on North American trading partners could impact cross-border flows. Trump pledged a 25% tariff on goods imported from Mexico and a 10% tariff on Canadian energy, but opted to wait while those governments formulate their response.
The integrated nature of the North American midstream network means U.S. refiners would still have to take in Canadian and Mexican barrels, though there could be other heavy, sour options such as Ecuador with its Oriente blend or Venezuela with its Merey grade.
Trump said during an interview with Fox News on Tuesday, however, that his administration was weighing its options when considering Venezuelan crude.
"We're looking at that now," he said. "We're looking at the whole situation."
Over the four-week period ending February 7, Venezuela delivered an average of 294,000 BBL/d to U.S. markets, compared with 119,500 BBL/d over the same period last year.
U.S. supermajor Chevron Corporation (NYSE:CVX) (San Ramon, California) works in Venezuela through a joint venture with state-run Petróleos de Venezuela (PDVSA) (Caracas, Venezuela). It was granted a special export license in 2023, though then-President Joe Biden said he was taking the issue largely on a case-by-case basis. All of Chevron's exports from Venezuela head to the United States.
Venezuela's economy depends largely on hydroelectric power to keep the lights on, though the viscous nature of its crude oil means it needs a diluent to move it through pipelines to refineries or for exports.
About 80% of its natural gas, meanwhile, is associated with oil reserves, and it is sometimes reinjected into oil fields to stimulate production. Venezuela is largely void of the infrastructure necessary for gas storage.
Sanctions imposed in response to accusations of fraudulent elections under Venezuelan President Nicolas Maduro have left much of the nation's energy infrastructure in shambles. In November, PDVSA reported a fire at the operational center for the Soto Gas Pipeline in the eastern state of Monagas, considered something of a hub for the nation's energy sector given its proximity to the Orinoco oil belt.
Trump's protectionist trade policies, along with his willingness to upend decades of U.S. foreign policy, may push both friends and enemies away. China, the second-largest economy after the United States, has also looked to Venezuela to feed its downstream sector. A Reuters report from January found China took in 351,000 BBL/d on average from Venezuela last year, about 20% more than the United States.
Venezuela is a founding member of the Organization of the Petroleum Exporting Countries (OPEC). OPEC economists in their monthly market report for February put Venezuelan crude oil production at around 900,000 BBL/d.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
