Written by: Marianna Parraga and Shariq Khan
HOUSTON/NEW YORK, Feb 3 (Reuters) – Oil refiners on the U.S. Gulf Coast are struggling to accommodate a rapid increase in Venezuelan crude shipments since last month’s $2 billion flagship deal between Caracas and Washington, weighing on prices and leaving some volumes unsold, according to traders and shipping data.
Weak U.S. demand has been an early hurdle to 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 Venezuelan President Nicolas Maduro during a raid in Caracas last month.
Trading companies Vitol and Trafigura were granted US licenses to market and sell millions of barrels of Venezuelan oil following the US operation and subsequent supply agreement with interim President Delcy Rodriguez.
Trading companies that approve exports of Venezuelan oil, along with energy giant Chevron, made several early deals to sell some cargoes to refineries in the United States and Europe. But with Chevron also rapidly increasing exports, it is now difficult for trading companies to find enough buyers among Gulf Coast refineries, traders said.
“We are all facing the problem of having more room and not enough buyers,” one trader said, pointing to the reluctance of U.S. refiners to buy Venezuelan crude. Some refiners complain that prices, although falling, remain high compared to competing Canadian heavy grades.
Venezuelan heavy oil cargoes for delivery to the Gulf Coast are being offered about $9.50 per barrel below the benchmark Brent, despite discounts of between $6 and $7.50 per barrel in mid-January.
Last month, Venezuela’s total oil exports to the United States nearly tripled to 284,000 barrels per day (bpd), according to data based on tanker movements.
The United States was buying about 500,000 barrels of oil a day from Venezuela before Washington imposed sanctions on the country in 2019. But exports to the US fell to zero in mid-2025 after Trump revoked all trade and shipping licenses.
It will take time for U.S. refineries to reach their maximum capacity again, in part because some facilities will require adjustments to process heavier oil, one trader said.
Mark Lashier, general manager of refinery Phillips 66, said Tuesday that the company can process about 250,000 barrels of Venezuelan crude oil per day, but prices must be competitive for Venezuelan grades to displace other sources of heavy oil.
Chevron and Trafigura declined to comment. Venezuela’s state oil company PDVSA and Vitol did not respond to requests for comment.
COMPETITION INCREASED
Chevron, whose existing Venezuelan license authorizes it to export only to the United States, increased exports from 99,000 barrels per day in December to 220,000 barrels per day in January.
Chevron CEO Mike Wirth told investors on Friday that the company’s refinery network could process 150,000 barrels per day of Venezuela’s heavy grades; This means the company must store or market the remaining portion among other refineries.
The company, the only US oil giant operating in Venezuela, produces approximately 250,000 barrels per day there. Wirth said the company sees the potential for a 50% increase in production in the next 18 to 24 months if the U.S. allows it to expand its operations.
Ship tracking data this week showed several Chevron-chartered tankers loaded with Venezuelan crude waited days at U.S. ports to unload or slowed navigation.
A person familiar with Chevron’s operations said the company had to negotiate new release dates with customers after a U.S. blockade of Venezuela caused shipment delays between December and January. However, the person added that all cargo was sold before departure.
Meanwhile, data showed that Vitol and Trafigura exported about 12 million barrels (equivalent to about 392,000 barrels per day) from Venezuelan ports in January, mostly to storage terminals in the Caribbean.
Sources said most of these are yet to be sold.
Total Venezuelan oil exports rose to nearly 800,000 barrels per day last month from 498,000 barrels per day in December.
China was previously the main destination for Venezuelan oil, but no oil has been sent there since Maduro’s capture in early January, data show. The US has said it will control Venezuela’s oil sales indefinitely after taking on Maduro.
While China is allowed to buy oil, it should not do so at the “unfair, low prices” at which Caracas has previously sold crude, a US official said last month.
Beijing has rejected a US takeover of Venezuela’s oil exports.
China’s state-owned PetroChina, previously the biggest buyer of Venezuelan crude, told traders not to buy or trade Venezuelan oil while it assessed the situation, separate sources told Reuters last week.
A potential relief valve for Venezuelan oil could come from India.
On Monday, Trump announced a trade deal with India that lowers U.S. tariffs on Indian goods in exchange for India lowering trade barriers, halting purchases of Russian oil and instead buying oil from the United States and potentially Venezuela.
India’s Reliance Industries announced last month that 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)
