Gulf refiners prepare for possible sanctions against Venezuela, look to Canada for crude

Gulf refiners see Venezuelan supplies dwindle

According to Bloomberg, Gulf refiners are looking to Canada as they prepare for possible Trump administration sanctions against Venezuela which could mean heavy crude supplies from the beleaguered South American nation would be drastically cut to US customers.

Canadian heavy crude from the Alberta oil sands is already a staple of US refineries.  US imports of Canadian oil could increase if crude imports from Venezuela, already on the decline due to commitments the country has with other crude buyers, drop off entirely if the US imposes sanctions on Venezuelan oil imports.

OilPrice.com reports that due to cash-for-oil deals signed in recent years, India and China are owed a great deal of Venezuelan crude.  As a result, supplies are currently being diverted away from the US market.

A telling sign of the brewing shortfall of Venezuelan crude to US Gulf refineries is that Citgo, a unit of Venezuela’s state-owned oil company PDVSA, is looking to purchase Canadian crude. Citgo operates refineries in Texas and Louisiana.

A major problem in relying on Alberta oil sands bitumen could be the lack of transportation options for moving the land-locked Canadian crude product to the US Gulf coast.

A number of Gulf Coast senators have appealed to the White House recently to avoid sanctions against the Venezuelan oil industry, arguing energy security was at stake.

President Trump is considering increasing sanctions against Venezuela after President Nicolas Maduro established a new assembly to overhaul the country’s constitution, a move to by-pass Venezuelan opposition-led congress.

“In Venezuela we are seeing the tragedy of tyranny play out before our own eyes in our own hemisphere,” Pence said. “The U.S. has many options for Venezuela. The the U.S. will continue to bring the full weight of economic and political power on Venezuela.”

 

 

 

 

 

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