Where is the Venezuelan Oil? US Refiners Want to Know

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(Bloomberg) — It’s been nearly a week since the Trump administration allowed Chevron Corp to resume oil production in Venezuela. US fuelmakers have yet to see that oil start flowing to markets. 

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Some refiners in Texas and Louisiana expected to receive offers of Venezuelan oil soon after the license was issued but have so far received none, according to people with knowledge of the matter. And Petroleos de Venezuela SA hasn’t assigned any cargoes for Chevron in July or August so far, according to port schedules and a person familiar with the situation, although crude continues to load for China.

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Details of the deal between Chevron and PDVSA are still scant, but the delay comes as the market is starved of the variety of of heavy oil Venezuela produces. The restart of flows to the US would add much-needed slack to global supplies of such grades of crude after nearly seven years of on-again, off-again sanctions against Venezuela, declining Mexican drilling and a prolonged period of curtailed production from OPEC and its allies. 

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Close to 4 million barrels a day of medium and heavy oil were taken off the market between 2022 and 2023, PBF Energy said in an earnings call Thursday. About half of those should come back by this autumn, when refinery maintenance starts, providing some relief into the third and fourth quarter, the Parsippany, New Jersey-based company said. 

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The lack of available Venezuelan oil come as a surprise because in 2022 Chevron started showing some of the barrels to refiners weeks before the actual license was issued, the people said. 

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Chevron declined to comment on Venezuelan oil flows. 

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“Chevron conducts its business globally in compliance with laws and regulations applicable to its business, as well as the sanctions frameworks provided for by the U.S. government, including in Venezuela,” the company said in a statement.

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The Trump administration allowed Chevron to restart pumping oil last Friday, pivoting away from a decision made two months earlier, when Chevron was forced to halt operations after a US license expired.

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For Valero Energy Corp, PBF Energy and Phillips 66 and other refiners, access to the crude could ease costs. Three years ago, Gulf Coast fuelmakers feasted on heavy barrels that were $20 cheaper than the light, pricier varieties. That discount has narrowed significantly over the years and is currently at $3.60 a barrel. 

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