According to traders and shipping information, oil refiners in the U.S. Gulf Coast struggle to absorb an influx of Venezuelan crude since last month's $2 billion deal, which was a "flagship" agreement between Washington and Caracas. This has pushed up prices and left some volumes unsold.

The U.S.'s soft demand is an early obstacle to President Donald Trump's plans to send the majority of Venezuela's oil back to the United States after U.S. forces captured Venezuela's 'President Nicolas Maduro' last month during a raid on Caracas.

Following the U.S. operations and an agreement to supply Venezuelan oil with interim president Delcy Rodriguez, trading houses Vitol & Trafigura received U.S. licensing for marketing and selling millions of barrels.

Trading houses that were approved to export Venezuelan crude oil along with energy giant Chevron struck early deals to sell cargoes to refiners across the U.S. Traders said that with Chevron increasing exports rapidly, it is now harder for the trading companies to find enough buyers in Gulf Coast refiners.

One of the traders, citing a reluctance by U.S. refiners in buying Venezuelan crude, said: "We all face this issue where there are more to place but not enough takers." Refiners complain that Venezuelan crude prices are still high, even though they have declined.

Venezuelan heavy crude oil cargoes to be delivered at the Gulf Coast have been offered at around $9.50 a barrel less than benchmark Brent. This compares with discounts between $6 and $7.50 a barrel at mid-January.

According to data based on tanker movements, the total Venezuelan oil exported to the U.S. last month almost tripled at 284,000 barrels per daily (bpd).

Before Washington imposed sanctions against Venezuela in 2019, the U.S. was taking in about 500,000 barrels per day of Venezuelan crude oil. Exports to the U.S. fell to zero by mid-2025, after Trump revoked licenses for trade and shipping.

One of the traders stated that it would take time to reach the U.S. refining capacity again, partly because some facilities will need adjustments to process heavier oils.

Mark Lashier, the chief executive officer of Phillips 66, stated on?Tuesday that his company is able to process around 250,000 bpd Venezuelan crude oil, but the prices of Venezuelan heavy oils must be competitive in order for them to replace other sources.

Chevron and Trafigura refused to comment. Venezuelan state oil company PDVSA, and Vitol have not responded to requests for comments.

Increased Competition

Chevron's current Venezuela license only allows it to export into the U.S. Chevron increased its exports from 99,000 to 220,000 barrels per day in January.

Chevron CEO Mike Wirth said to investors on Friday that its refining network could process up 150,000 bpd Venezuela's heavy grade, meaning it would have to store or sell the remainder among other refiners.

The company, the only U.S. major oil producer in Venezuela, produces around 250,000 bpd. Wirth stated that the company is looking at a potential 50% increase in output over the next 18-24 months, if the U.S. allows it to expand its operations.

This week, vessel monitoring data showed that several Chevron chartered tankers with Venezuelan crude were waiting days for discharge in U.S. port or slowed navigation.

According to a person familiar with Chevron operations, the company was forced to negotiate new discharge dates?with its customers following a U.S. Blockade of Venezuela that caused shipping delays in December and January. The person said that all cargos were sold prior to departure.

Vitol and Trafigura, however, exported 12 million barrels, or?around 392,000 barrels per day, from Venezuelan ports, mainly to storage terminals located in the Caribbean.

Sources claim that a large portion of the product has yet to be sold.

Last month, the total Venezuelan oil exports jumped to nearly 800,000 barrels per day (bpd) from 498,000 in December.

Data shows that China used to be the top destination for Venezuelan crude oil. However, since Maduro was captured in early January, no oil has been shipped there. After 'capturing Maduro, the U.S. announced that it would continue to control Venezuelan oil sales.

A U.S. official stated last month that while China may purchase crude oil, the price must not be "unfairly low" compared to the prices Caracas previously sold it at.

Beijing has rejected U.S. plans to take over Venezuela's oil exports.

Separate sources said last week that China's PetroChina, the state-owned company which was the biggest receiver of Venezuelan crude oil, had told traders to refrain from buying or trading Venezuelan oil until it assessed the situation.

India could be a potential source of a relief valve for Venezuelan oil.

Trump announced on Monday a deal with India to lower U.S. trade barriers and stop buying Russian oil in exchange for India purchasing oil from the U.S. or Venezuela.

Reliance Industries, an Indian company, said last month that it would consider importing Venezuelan crude oil.

(source: Reuters)