Author: Marianna Paraga and Sharik Khan
HOUSTON/NEW YORK (Reuters) – U.S. Gulf Coast refiners are struggling to absorb a rapid increase in Venezuelan crude shipments since a $2 billion flagship supply deal was struck between Caracas and Washington last month, putting pressure on prices and leaving some crude unsold, according to traders and shipping data.
Weak U.S. demand has posed an early obstacle to President Donald Trump’s hopes of shipping most of the South American country’s oil to the United States since U.S. troops captured Venezuelan President Nicolás Maduro in a raid in Caracas last month.
Vitol and Trafigura obtained a U.S. license to market and sell millions of barrels of Venezuelan oil after operating in the U.S. and subsequently striking a supply deal with interim President Delcy Rodriguez.
The trading companies, along with energy giant Chevron, have secured approval to export Venezuelan oil and have struck several early deals to sell some cargoes to U.S. and European refiners. However, with Chevron exports also rising rapidly, trading companies are now finding it difficult to get enough buyers at Gulf Coast refineries, traders said.
“We all have the problem of more supply but not enough buyers,” one trader said, adding that U.S. refiners were reluctant to buy Venezuelan crude. Some refiners have complained that despite the decline, prices remain high compared with competing Canadian heavy crudes.
Venezuelan heavy oil cargoes for delivery on the Gulf Coast are quoted at about $9.50 a barrel below benchmark Brent crude, compared with a discount of $6 to $7.50 a barrel in mid-January.
Total Venezuelan oil exports to the United States nearly tripled last month to 284,000 barrels per day (bpd), according to tanker shipping data.
Before Washington imposed sanctions on Venezuela in 2019, the United States absorbed about 500,000 barrels of Venezuelan oil per day. But exports to the United States fell to zero in mid-2025 after Trump revoked all trade and shipping licenses.
It will take time for U.S. refineries to reach maximum capacity again, in part because some facilities need to be adjusted to process heavier oil, a trader said.
Refiner Phillips 66 can process about 250,000 barrels per day of Venezuelan crude, but the price of Venezuelan crude must be competitive to displace other sources of heavy oil, Chief Executive Officer Mark Lashier said on Tuesday.
Chevron and Trafigura declined to comment. Venezuela’s state oil company PDVSA and Vitol did not respond to requests for comment.
competition intensifies
Chevron’s current Venezuelan license only authorizes exports to the United States, and the company’s exports increased to 220,000 bpd in January from 99,000 bpd in December.
Chevron Chief Executive Mike Wirth told investors on Friday that the company’s refining network can process up to 150,000 barrels per day of Venezuela’s heavy crude, meaning the company must store or sell the remainder to other refiners.
The company is the only U.S. oil major operating in Venezuela, which produces about 250,000 barrels per day. Wirth said the company expects production to grow 50% in the next 18 to 24 months if the U.S. authorizes it to expand operations.
Ship monitoring data this week showed that several Chevron-chartered tankers carrying Venezuelan crude were waiting days to unload at U.S. ports or were sailing at slower speeds.
A person familiar with Chevron’s business said the company must negotiate new unloading dates with customers after the U.S. blockade of Venezuela caused shipping delays between December and January. But the person added that all goods were sold before departure.
Meanwhile, Vitol and Trafigura exported about 12 million barrels from Venezuelan ports in January, equivalent to about 392,000 barrels a day, with the bulk destined for storage terminals in the Caribbean, data showed.
Most of them are yet to be sold, sources said.
Venezuela’s total oil exports rebounded from 498,000 barrels per day in December to nearly 800,000 barrels per day last month.
Data shows that China was previously the largest destination for Venezuelan oil, but no oil has been exported to China since Maduro was arrested in early January. After capturing Maduro, the United States said it would indefinitely control Venezuela’s oil sales.
A U.S. official said last month that while China was allowed to buy oil, it was not allowed to do so at the “unfair, low” prices Caracas had been selling crude oil at.
Beijing rejects U.S. takeover of Venezuelan oil exports.
Last week, sources told Reuters that China’s state-owned PetroChina, which had been the largest recipient of Venezuelan crude, had told traders not to buy or trade Venezuelan oil as it assessed the situation.
A potential safety valve for Venezuelan oil could come from India.
On Monday, Trump announced a trade deal with India that would cut U.S. tariffs on Indian goods in exchange for India lowering trade barriers and stopping purchases of Russian oil in favor of buying oil from the U.S. and possibly Venezuela.
India’s Reliance Industries said last month it was considering importing Venezuelan oil.
(Reporting by Marianna Parraga in Houston and Shariq Khan in New York; Additional reporting by Georgina McCartney and Sheila Dang; Editing by Rosalba O’Brien)
