According to traders and shipping data, oil refiners in the U.S. Gulf Coast struggle to absorb the rapid increase of Venezuelan crude since last month's $2 billion deal between Caracas & Washington. This has pushed up prices and left some volumes unsold.

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

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 said that U.S. refiners were reluctant to purchase Venezuelan crude. Refiners complain that despite the fact that prices are declining, they remain high when compared with Canadian heavy grades.

Venezuelan heavy crude oil cargoes to be delivered at the Gulf Coast are now being offered for $9.50 below Brent benchmark, as opposed to discounts between $6 and $7.50 in mid-January.

A trader reported that Canadian WCS crude oil for delivery to Gulf Coast traded at a $10.25 discount per barrel compared to Brent futures.

According to tanker movement data, 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 already absorbing 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 maximum capacity of U.S. refiners again, partly because some facilities would need adjustments to process heavier oils.

Mark Lashier, the chief executive of Phillips 66, said that it can process 250,000 bpd Venezuelan crude. However, prices need to be competitive in order for Venezuelan grades of oil to replace other heavy oils, he added.

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 barrels per day. Wirth stated that the company could increase its output by 50% in the next 18-24 months if the U.S. allows it to expand.

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

According to a person familiar with Chevron operations, the company was forced to negotiate new discharge times with customers due to shipping delays caused by a U.S. embargo on Venezuela between December and early January. The person added that all cargoes were sold prior to departure.

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

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

Last month, total Venezuelan oil exports jumped to nearly 800,000 bpd, up from 498,000 in December.

According to the data, China used to be the number one destination for Venezuelan crude oil. However, since Maduro was captured in early January, no oil has been shipped there. After Maduro was captured, the U.S. announced that it would continue to control Venezuela's oil exports indefinitely.

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 the U.S. The U.S.

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)