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Gulf Coast Refineries in the United States are importing crude oil from other countries in order to insulate themselves from possible US-imposed sanctions on Venezuela.
Using data compiled in part from the EIA, S&P Global Platts reported on Wednesday that for the month of January 2018, just five US Gulf Coast refineries imported a whopping 92 percent of all Venezuelan crude oil that comes into the United States.
The five refineries—which include Chevron’s Pascagoula refinery, Citgo’s Lake Charles and Corpus Christi refineries, and Valero’s Port Arthur and St. Charles refineries—are therefore particularly vulnerable to supply disruptions from the troubled Latin nation.
This vulnerability has not been lost on the Trump Administration, which has been hesitant to impose sanctions on crude oil shipments coming into the US from Venezuela. But while sanctions on Venezuelan crude have not been imposed, fear remains, and the refineries are hedging their bets, although not without creating some logistical headaches.
In January, US Gulf Coast refineries that have been reliant on Venezuelan crude oil have taken an increased amount of crude oil from other countries, and Canadian crude oil imports to Gulf Coast refineries outpaced Venezuelan imports for the first time ever.
Other bet-hedging efforts was seen, according to Platts, from Citgo’s Corpus Christi refinery, which took 52 percent more Ecuadorean crude in January over the previous January. Citgo also took crude oil from Chad for the first time, and from Colombia—only the second time it has done so. Valero’s Port Arthur refinery looked to Iraqi crude oil to fill the void, and Chevron took some Saudi crude.
In all, Gulf Coast imports of heavy sour crude fell to 1.85 million barrels per day in January—down from 2.31 million barrels per day the pervious January.
While the Trump administration is still considering sanctions on Venezuelan crude oil, it surely understands that doing so will hurt US refineries.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.