Venezuelan sanctions unlikely to have a significant impact on U.S. refiners (2/6/2019)

U.S. imports of Venezuelan crude oil have decreased in recent years as production in Venezuela declined (Figure 1). Recently announced U.S. sanctions directed at Venezuela’s energy sector and state oil company, Petróleos de Venezuela, S.A. (PDVSA), will essentially eliminate U.S. imports of Venezuelan crude oil as the full effects of the sanctions emerge. However, the U.S. Energy Information Administration (EIA) does not anticipate any significant decrease in U.S. refinery runs as a result of these sanctions. U.S. imports of Venezuelan crude oil have been falling for several years and refineries have been replacing Venezuelan crude oil with other heavy crude oils. Moving forward, refineries may also choose to run lighter crude oils because transportation constraints may limit the availability of heavy crude oils. Refiners with significant asphalt and road oils processing unit capacity, for which Venezuelan crude oil is well suited, may have a harder time finding adequate replacements; however, these refineries have also limited imports from Venezuela recently. ... More »