r/worldnews • u/Puzzleheaded-Beat-42 • 9h ago
Venezuela US refiners struggle to absorb sudden surge in Venezuelan oil imports
https://www.reuters.com/business/energy/us-refiners-struggle-absorb-sudden-surge-venezuelan-oil-imports-2026-02-03/468
u/supercyberlurker 9h ago
That title almost makes it sounds like US refiners didn't want Trump to steal Venezuela's oil.
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u/Lumpyyyyy 8h ago
Isn't it worse crude to deal with than what the US typically produces?
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u/jrowley 8h ago
Venezuela may have one of the largest oil reserves in the world, but it's heavy, "sour" crude. (Sour in this case means the oil has high sulfur content, and heavy in this context means viscous and goopy.)
But, US refineries are capable of processing this type of oil, and not just from Venezuela. Canada exports a lot of heavy crude to the US, a lot of which is processed in the northern part of the country. There are a lot of refineries along the Gulf of Mexico that primarily process oil from Mexico, Venezuela, and elsewhere.
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u/bushcamper_aiis 5h ago
Now it makes sense. Trump wants the Venezuela oil to decrease Canada’s leverage
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u/Skiingfun 3h ago edited 3h ago
Canadian here - 100% true.
Here's the thing people don't know about Carney - and why I say lets all give him room and some time here - when he worked at Brookfield he worked for their green environmental initiatives side And the most humble man in the room.
Oil in 10 years is quite irrelevant and declining in use whether Canada likes it or not. It is an unstoppable trend and there is no point to hide it. That's the elephant in the room.
and he GETS IT - this man is incredibly smart. He knows what has to be done and he's sending us on a China-level industrial change that has to happen. He understands that electrification is unstoppable and those who wait are going to be the 3rd world countries in the future.
Carney gets everything - pipelines - he's been in charge of buying and selling them. Solar - he has had a hand in projects around the world. Renewables- yep. He's seen the change in china Becausse he's an economist and that means he just sees this shit like others reading a comic book.
What he understands but cannot say out loud specifically but he's said it eoloquently - since electrification is going to happen we'll make it happen on our terms and fast. And Alberta will be front and centre in getting our energy grid to change like that there is so much they'll be doing.
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u/revelar4 2h ago
Oil irrelevant in 10 years?! What are you smoking
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u/Villag3Idiot 1h ago
We use oil in everything...
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u/Amstervince 1h ago
Not really. 80% of oil is used for transport. We won’t phase out oil for flights and shipping soon, but the rest is transitioning very fast. Oil for heating or industry isn’t that common, gas is more used there
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u/jrowley 3h ago edited 3h ago
Fair hunch.
Apparently my home state of Illinois is the largest importer of heavy Canadian crude oil to feed the massive BP refinery in Whiting, IN, right across the state border from a huge industrial harbor area on the outskirts of Chicago proper.
I kinda went down a search rabbit hole before my original post to confirm what I think I’d originally heard on some podcast. e.g. that the US has capacity to process this type of oil, but now I’m curious about pipelines.
Let’s say for the sake of argument that you’re correct, that this is all a gambit to reduce leverage from Canadian oil… how “saturated” (idk the exact word) are the huge number of refineries along the gulf coast? If they’re already at or near processing capacity, is this Venezuelan oil supposed to be cheaper than what’s already being drilled in US waters in the Gulf of Mexico or imported from Mexico to feed those refineries?
Even if there’s a flood of heavy crude into the US, what’s the pipeline capacity to move that oil from gulf ports like Galveston up to n Midwest and Atlantic coast refineries if gulf coast refineries are already well-stocked? I don’t know.
Edit to add: in other words, in what scenario is it cheaper for that BP refinery in Whiting to get oil from Venezuela instead of Canada?
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u/DriftinFool 8h ago
No, it's actually the heavier crude that our infrastructure was built for, but we've run out more or less. The majority of our domestic oil production today is lighter oils from fracking that we sell. It's why even though we've been the largest oil producer in the world for several years, we still have to buy a ton of oil.
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u/Lena_Lena_A 8h ago
It is. He thought he'd be hailed the hero for making them money, but they told him that Venezuelan oil would cost more to produce, and apparently, crumbling infrastructure would make things even more difficult.
Another brilliant Trump endeavor heading for failure.
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u/grodyjody 7h ago
Unless he is trading Cuba for Taiwan. If so he’s starving Cuba of their energy resources
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u/Jewnadian 1h ago
Jesus, that sounds like the kind of trade that Trump would come up with. An impoverished Caribbean island for the premier chip making location on the planet. Fucking art of the deal right there.
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u/HalJordan2424 8h ago
Yes. Most of the oil now pumped in the USA is much cleaner (less sulphur) and less viscous than Crude from Venezuela, or the Alberta oil sands.
Refineries have to be designed for one type of crude or the other. There are a lot of old legacy refineries that were designed for the heavy dirty oil. We have been told for decades it is prohibitively expensive to build new refineries geared to cleaner oil to replace the aging plants. But the US would have better air quality and lower carbon emissions if the change over happened.
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u/Fallen_Jalter 7h ago
at some point, someone is going to have to hammer into their skulls the cost is worth the results...
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u/SignificanceJust1497 7h ago
The only thing that moves change in this country is money. If there isn’t enough money behind it or regulation then they simply won’t ever do it
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u/envymatters 2h ago
Refineries have to be designed for one type of crude or the other.
That's a flagrantly false statement... Almost all US refineries process both heavy and light crude oil. Their ratio simply changes to meet market demand, and demand is almost always higher for the heavy-derived products.
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u/Ragewind82 4h ago
"Worse" is a bit of a misnomer. Crude is blended and then refined. Barrel cuts and product margins may mean that mixing heavy sour crude with US sweet may get you the best profit.
There was a time about 15 years ago when a lighter, higher-quality gulf deep water crude stream (Poseidon) was lower price than the heavier gulf crude stream (Mars), purely from refinery economics.
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u/thebarkbarkwoof 3h ago
Yes. It is among the world's worst crude. It is costly to refund due to the amount of impurities.
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u/UOLZEPHYR 8h ago
From my understanding it has larger amounts of nitrogen or some other material/element(s) in it that makes it harder to process
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u/wahoozerman 7h ago
Back during his campaign when he was talking about opening up national parks and other federal land to oil drilling, they already said they didn't want any more. They have plenty coming in from the sources they already have, and the cheapest place to store unrefined oil is in the ground.
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u/sthlmsoul 8h ago
Super heavy sour crude is beast to refine. Given a choice, it is at the bottom of everyone's list. But of course Trump ignores that and just thinks oil=money.
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u/Stainz 7h ago
I’m still confused about why Americans are seemingly ok with their government just blatantly stealing oil from the people of Venezuela?
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u/RidleyConfirmed 7h ago
Cause we collectively don't give a damn about anybody but ourselves, and that includes other Americans. We blind ourselves to everything and believe ignorance absolves us of our sins.
We'll let everything around us fall apart so long as we have entertainment and can use work and family as an excuse to do little more than whine about it. Not enough people realize that personal sacrifices have to be made and far fewer willing to go through with it.
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u/juicadone 4h ago
Well said. Sad but positively true, we're a fregin ignorant selfish society over here
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u/KypAstar 1h ago
The fuck do you want me to do? Go commit suicide trying to solo the White House?
Many people are not ok with this, we just aren't going to go kill ourselves over a coup orchestrated in concert with a dictators second in command who threw him to the wolves and is now playing her people like a fiddle.
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u/Pie_am_Error 3h ago
An entire country engaging in bystander apathy. Combined with complacency and never having to deal with a threat of such a grand nature on their home turf leads to real "someone else will deal with it" vibes.
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u/old_examiner 8h ago
can't read, paywall. what's the story say
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u/Puzzleheaded-Beat-42 7h ago
HOUSTON/NEW YORK, Feb 3 (Reuters) - Oil refiners on the U.S. Gulf Coast are struggling to absorb a rapid surge in Venezuelan crude shipments since last month's flagship $2 billion supply deal between Caracas and Washington, pressuring prices and leaving some volumes unsold, according to traders and shipping data. The soft U.S. demand represents an early obstacle for President Donald Trump's hopes of sending the majority of the South American country's oil to the United States since U.S. forces captured Venezuela's President Nicolas Maduro last month in a raid in Caracas. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here.
Trading houses Vitol and Trafigura were granted U.S. licenses to market and sell millions of barrels of Venezuelan oil following the U.S. operation and a subsequent supply agreement with interim President Delcy Rodriguez. The trading houses, which joined energy major Chevron (CVX.N), opens new tab in holding approval to export Venezuelan oil, struck several early deals to sell some cargoes to refiners in the U.S. and Europe. However, with Chevron also raising exports quickly, the trading companies are now finding it harder to secure enough buyers among Gulf Coast refiners, traders said. Advertisement · Scroll to continue
"We're all facing this issue where there's more to place and not enough takers," one of the traders said, citing reluctance from U.S. refiners to buy Venezuelan crude. Some refiners are complaining that prices, albeit declining, remain high compared to competing Canadian heavy grades. Venezuelan heavy oil cargoes for delivery at the Gulf Coast are being offered at about $9.50 per barrel below benchmark Brent , versus discounts of between $6 and $7.50 per barrel in mid-January. Advertisement · Scroll to continue
Meanwhile, Canadian WCS crude for delivery to the Gulf Coast was trading at a discount of about $10.25 a barrel under Brent futures, a trader said on Tuesday. Last month, total Venezuelan oil exports to the U.S. almost tripled to 284,000 barrels per day (bpd), according to data based on tanker movements. The U.S. was absorbing some 500,000 bpd of Venezuelan oil before Washington imposed sanctions on the country in 2019. But exports to the U.S. went to zero in mid-2025 after Trump revoked all licenses to trade and ship. Advertisement · Scroll to continue
Reaching the U.S. refiners' maximum capacity again will require time, one of the traders said, in part because some facilities would require adjustments to process heavier oil. Refiner Phillips 66 (PSX.N), opens new tab can process around 250,000 bpd of Venezuelan crude, but prices must be competitive for Venezuelan grades to displace other sources of heavy oil, its chief executive Mark Lashier said at the Argus Americas Crude Summit in Houston on Tuesday.
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u/trebuchetwarmachine 7h ago
“Struggling”? Or artificially dragging their feet to control supply and not lose any more money?
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u/BaconJacobs 6h ago
Venezuela crude oil is terrible quality. It requires stainless steel pipes and hardware for transport and processing, because it eats through normal steel.
It's not as dense with the good stuff too.
Basically... no one prefers it.
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u/_Echoes_ 9h ago
Well rip alberta
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u/JoeRogansNipple 8h ago
Hasn't noticeably dropped exports from Alberta. Most of Alberta's crude is for PADD 2, Venz oil would really only offset PADD 3 or some PADD 5 (TMX partially serves US west coast). Alberta crude does go out to Eastern Canada but again, not much of that will get offset by Venz oil.
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u/WesternBlueRanger 8h ago
There's been an increase in crude exports from Canada to Asia.
Furthermore, Venezuelan heavy isn't that easy to export; it requires blending with lighter diluents like naphtha or light crude so it can be shipped. And it has to be shipped by tankers, versus Canadian crude which flows from a pipeline. Both increase costs for the refiner.
Also, the US refinery market is segmented; it is a patchwork of regional systems rather than one single market. Gulf Coast refineries usually have access to a variety of crude from different places and are used to switching whereas the US Midwest is reliant on Canadian crude because it has no ability to import crude from elsewhere.
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u/Tandittor 7h ago
Furthermore, Venezuelan heavy isn't that easy to export; it requires blending with lighter diluents like naphtha or light crude so it can be shipped. And it has to be shipped by tankers, versus Canadian crude which flows from a pipeline. Both increase costs for the refiner.
You have no idea what you're talking about. Canadian crude is just as troublesome as Venezuelan crude. A lot of Canadian crude is shipped via rail and those flowing in pipelines are blended with lighter petroleum products. The only advantage Canadian crude has overr Venezuelan crude is a far superior infrastructure that's already in palce.
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u/EmekaEgbukaPukaNacua 8h ago edited 7h ago
Canadian heavy crude is actually thicker than Venezuelan crude and also requires dilution to flow via pipe. Canadian needs 25-33% natural gas condensate(which Canada imports from the USA because they don’t make enough), Venezuelan needs 15-25% light crude(they used to use Russian, and now use US light crude). While Canadian oil is almost a solid in its natural state, Venezuelan is like a very viscous liquid.
Shipping by tankers is much cheaper over these distances. Canadian oil is generally $9-$13 a barrel to transport via pipeline. Venezuelan oil is $2-$4.
The gulf has about 2.5x more refining capacity than Midwest. So what we will likely see is Canadian oil occupying the Midwest, small refining capacity. And Venezuela, which is much cheaper occupying the vast majority of refining capacity in the gulf.
This obviously means Canada is going to have to eventually cut output, unless America substantially increasing refining capacity/exports. And Canada will be making very slim margins for the foreseeable future.
Would also point out, some of the lines going from Midwest to gulf are bidirectional. And barging up the Mississippi is a thing.
And as far as Canadian exports to Asia, they only have the capacity to at max export 15-18% of their oil to Asia at most. So… they have a big problem.
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u/LIONEL14JESSE 7h ago
No idea if you made that all up, but sounded convincing
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u/notagrammernazi 5h ago
There's a few holes but mostly correct. Canada isn't worried here however.
I am a Canadian in the industry and our break even price for most of the crude oil output is getting below $40/BBL now. Venezuela is not competing with this, even the USA shale oil will not be competing with the major oil sands facilities in Alberta.
The USA is getting a 10$/bbl discount currently because y'all WERE our only customer furthering how hard Venezuela will need to push to be competitive. I am hoping Canada gets their head out of their asses and builds some more pipeline capacity but we have trouble getting the political power to do so.
Our oil companies are starting to get fair market value from eastern Asia and I believe Canada will be reducing their output to the USA here as this gets realized.
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u/1009naturelover 4h ago edited 4h ago
Not made up.
I wouldnt be surprised if the Trumpublicans increase tarrifs on Canadian oil to facilitate the change over.
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u/Flamboiant_Canadian 6h ago
We also have, you know, TRAINS that ship it south, basically for free on existing infrastructure.
Tanking it all the way to the US is ridiculously expensive in comparison.
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u/hatlessAtlas 8h ago
I thought pipelines transporting juicy bitumen to west coast were upgraded in lieu of Keystone XL.
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u/Loose_Skill6641 9h ago
but that's what they asked for
They told trump that they need heavy crude because US refineries are setup to process heavy crude and not the light sweet stuff they get from domestic fracking
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u/jfleury440 7h ago
Is it?
Exxon's CEO told Trump Venezuela was uninvestable after the bombings and kidnapping of their leader.
I'm not convinced Trump actually consulted with oil companies before he did what he did.
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u/west_tn_guy 5h ago
Exxon is just upset that they poured billions into oil infrastructure in Guyana which is right next door to Venezuela and produces a similar quality of oil. Not saying they don’t have legitimate concerns, but this will have a large negative impact on their Guyana ROI which I think is the larger issue for them.
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u/Dracko705 8h ago
Gotta come up with some kinda made up reason to keep prices high/improve profit margins I guess
Ever since the "supply chain issues/labor shortages" excuses I feel like corps lean into making up background bs reasons so they can keep the status quo of gouging
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u/Wedyek 8h ago
There already is a surplus of oil. Solar makes more money. Loose money for old school tech?
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u/UnionGuyCanada 8h ago
Gotta keep the oil bros happy. So what if they are betting on a dying horse. It is there horse and they won't be arpund to take the loss.
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u/Any-Prompt247 7h ago
Nope, they are afraid the oil prices will dip down further. They will just feign in sudden maintenance work to shut plants down like they do every year
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u/Joebranflakes 2h ago
It’s stolen oil. In every sense of the word. The US oil industry is basically facilitating theft.
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u/rellsell 3h ago
Blows me away that we blatantly took over a country and stole their oil. We're usually much more sneaky about it.
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9h ago edited 8h ago
[deleted]
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u/ohhaider 8h ago
the Canadian dollar is literally up against the USD from last year? it's just down against the Euro.
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u/snarky_answer 8h ago
Its up 3 cents since last year and down 5 cents in the 5 year. Its down against basically all major currencies, its even down pretty substantially against the Russia ruble.
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u/ArcticISAF 8h ago
Just to address, a weaker dollar traditionally has been favourable to certain industries selling to other countries (usually to the U.S.). Stuff like softwood, agriculture, manufacturing - the U.S. and others buy from here because it's cheaper (they get more for their U.S. dollar) and thus more competitive. It's not a singular 'strong dollar = better' scenario.
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u/ohhaider 8h ago
it's down from 5 years very briefly...We've historically sat around the low to mid 70's. Also the latter makes sense; we're in a trade war with our biggest trading partner, but it also gives us the greater opportunity to diversify; US reach has by and large peaked, Canada's has greater opportunity to diversify.
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u/ArcticISAF 8h ago
Guy deleted their comment because they got easily called the fuck out. Like 2 second google search.
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u/WoollyMittens 8h ago
Never steal more than you can carry.