• 45 mins Aramco In Talks With Chinese Petrochemical Producers
  • 2 hours Federal Judge Grants Go-Ahead On Keystone XL Lawsuit
  • 3 hours Maduro Names Chavez’ Cousin As Citgo Boss
  • 10 hours Bidding Action Heats Up In UK’s Continental Shelf
  • 15 hours Keystone Pipeline Restart Still Unknown
  • 19 hours UK Offers North Sea Oil Producers Tax Relief To Boost Investment
  • 21 hours Iraq Wants To Build Gas Pipeline To Kuwait In Blow To Shell
  • 23 hours Trader Trafigura Raises Share Of Oil Purchases From State Firms
  • 1 day German Energy Group Uniper Rejects $9B Finnish Takeover Bid
  • 1 day Total Could Lose Big If It Pulls Out Of South Pars Deal
  • 1 day Dakota Watchdog Warns It Could Revoke Keystone XL Approval
  • 2 days Oil Prices Rise After API Reports Major Crude Draw
  • 2 days Citgo President And 5 VPs Arrested On Embezzlement Charges
  • 2 days Gazprom Speaks Out Against OPEC Production Cut Extension
  • 2 days Statoil Looks To Lighter Oil To Boost Profitability
  • 2 days Oil Billionaire Becomes Wind Energy’s Top Influencer
  • 2 days Transneft Warns Urals Oil Quality Reaching Critical Levels
  • 2 days Whitefish Energy Suspends Work In Puerto Rico
  • 2 days U.S. Authorities Arrest Two On Major Energy Corruption Scheme
  • 3 days Thanksgiving Gas Prices At 3-Year High
  • 3 days Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 3 days South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 3 days Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 3 days Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 3 days Iraq Steps In To Offset Falling Venezuela Oil Production
  • 3 days ConocoPhillips Sets Price Ceiling For New Projects
  • 6 days Shell Oil Trading Head Steps Down After 29 Years
  • 6 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 6 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 6 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 6 days Venezuela Officially In Default
  • 6 days Iran Prepares To Export LNG To Boost Trade Relations
  • 6 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 6 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 7 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 7 days Rosneft Announces Completion Of World’s Longest Well
  • 7 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 7 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 7 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 7 days Santos Admits It Rejected $7.2B Takeover Bid
Alt Text

Can Russia Break Its Oil Dependence?

Russia’s economic growth is struggling,…

Alt Text

Chinese Crude Inventories Fall For First Time In 12 Months

Chinese crude oil inventories have…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…

More Info

Oil Tycoon Pushes For Venezuela Sanctions

Venezuela

The U.S. has stepped up sanctions against Venezuelan individuals in the wake of the July vote in Venezuela aimed at rewriting the constitution, which is further eroding democracy in the country with the world’s largest proved oil reserves. Further sanctions— namely against Venezuela’s oil industry by imposing a ban on U.S. imports of Venezuelan crude— are not off the table either, as the U.S. contemplates additional measures to stymie the progress of Nicolas Maduro’s authoritarian regime.   

The possibility of Venezuelan oil import restrictions has divided White House advisors, and now is pitting Harold Hamm, chairman and CEO of Continental Resources and energy advisor during President Trump’s campaign, against U.S. refiners that import Venezuelan crude to process at their refineries.

Hamm favors the approach of cutting off Venezuelan oil exports to the U.S., as well as stopping U.S. light sweet crude exports to Venezuela, which uses that type of crude to blend it with its heavy crude oil before shipping it to international markets.

“If the president wants to make an immediate impact on Venezuela to stop these human rights abuses and restore the situation, he’s got the ability to,” Hamm told Bloomberg in an interview in his capacity as head of the Domestic Energy Producers Alliance.

The U.S. refiners, however—many of whom import Venezuelan oil for their Gulf Coast facilities adapted to process the heavy crude—are railing against any oil-related sanctions on Venezuela. They argue that possible sanctions on the Venezuelan energy sector would harm the U.S. industry, and cause it to scramble for heavy crude supplies from elsewhere, which would result in higher fuel prices for consumers. Related: Saudi Oil Minister Just Did Something He Has Never Done Before

According to the latest available EIA data on U.S. crude imports, Venezuela was the third biggest provider of crude oil to the United States in May this year, with 708,000 bpd of imports and behind only Canada and Saudi Arabia.

Venezuela-owned Citgo Petroleum, as well as Valero, Phillips 66, Chevron, and PBF Energy Inc, are most dependent on Venezuelan supplies. Those companies are also the ones most actively lobbying in Washington against potential sanctions on Venezuelan oil, Bloomberg reports, citing four people in the know.

According to U.S. Customs data compiled by Bloomberg, Venezuelan crude represented 43 percent of the refinery capacity at Chevron’s Pascagoula refinery in July, as well as 62 percent of Valero’s St. Charles refinery capacity. 

Prices for the heavy sour crude grades like the one Venezuela is supplying to the U.S. would increase in case of energy sanctions, Valero Energy Corp’s Vice President Gary Simmons said last month, adding that a ban would send Venezuelan cargoes to markets other than the U.S. Gulf Coast.

And while Hamm is supporting oil-related sanctions on Venezuela, U.S. refiners and Republican Senators from Gulf Coast states are actively lobbying against potential bans.

Last month, the American Fuel & Petrochemical Manufacturers (AFPM), which represents more than 95 percent of the U.S. refining sector, sent a letter to President Trump, in which it argued that refineries along the Gulf Coast have made substantial investments to process heavy crude, particularly of the Venezuelan variety. Sanctions would destabilize crude markets, it claims, as U.S. refiners would have to source supplies from other markets, which do not offer suitable alternative sources of supply, the AFPM said.

“In short, sanctions on Venezuela’s energy sector will likely harm U.S. businesses and consumers, while failing to address the very real issues in Venezuela,” the refiners said.

Last week, Senator Bill Cassidy, MD (R-LA) sent a letter to President Trump, “urging the administration to protect Gulf refiners from indirect harm caused by potential Venezuelan energy sanctions.” Related: U.S. Oil Sanctions Could Push Venezuela To The Brink

“While deliberating the spectrum of potential responses, we believe it is critical to consider the role that the U.S. energy industry and refining sector play in our economic and national security interest. Oil refineries along the U.S. Gulf Coast that process the heavier grades of Venezuelan crude represent a significant portion, nearly 10 percent, of U.S. imports.  Blockading imports could inflict great harm on this industry and burden U.S. taxpayers with the cost,” the letter co-authored by Senators John Cornyn (R-TX), Thad Cochran (R-MS), and Roger Wicker (R-MS), reads.

While oil tycoon Hamm supports the U.S. response that would hurt Venezuela’s oil and thus its only foreign reserve income, U.S. refiners argue that sanctioning Venezuela’s energy sector would have wide-ranging impacts on the U.S. industry and fuel market, and on global heavy crude flows.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment
  • Prsnep on August 14 2017 said:
    "Oil Tycoon Pushes For Venezuela Sanctions"

    Well, this isn't good.
  • Refman on August 15 2017 said:
    If you're a shale guy like Ham, then yes you would be all for sanctions.
  • Dan on August 15 2017 said:
    We have a long way to go before higher prices affect the consumer, just look at what autos are selling and who is buying. Do the oil sanctions and at same time do food relief through a neighboring country.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News