Last week it was reported that the Trump Administration is considering significant sanctions on Venezuela. The threat of sanctions is in response to Venezuelan President Nicolas Maduro’s pledge to rewrite his country’s constitution on July 30. President Trump promised that if he followed through, the U.S. “will take strong and swift economic actions,” which could impact Venezuela’s oil exports to the U.S. A decision is expected as early as this week.
According to the most recent data from the Energy Information Administration (EIA), Venezuela presently exports 800,000 barrels per day (BPD) of oil to the U.S. Venezuelan imports rank third behind Canada and Saudi Arabia, but Venezuela is the top source of foreign oil for U.S. Gulf Coast refineries.
How might the loss of Venezuelan crude impact refiners in the U.S.? Let’s investigate.
EIA data indicate that 13 US refineries imported Venezuelan crude in 2016. Here is the breakdown of all 13, in order of descending amount of crude processed:
Refineries that processed Venezuelan crude oil in 2016.
The Phillips 66 (NYSE: PSX) Refinery in Sweeny, Texas imported just over 46 million barrels of Venezuelan crude last year, the most of any US refinery in 2016. However, this was the only Phillips 66 refinery to use Venezuelan crude. Nevertheless, the capacity of this refinery is about 80 million barrels of crude per year, which means more than half of its crude slate last year was sourced from Venezuela. However, across the entire company, Venezuelan crude amounts to under 6% of Phillips 66’s total crude oil capacity for all its refineries.
Where things start to get interesting is with Citgo, which is owned by Venezuela’s state oil company, PDVSA. Citgo’s Lake Charles, Louisiana, refinery imported nearly 45 million barrels of Venezuelan crude in 2016. Another Citgo refinery in Corpus Christi, Texas imported 21.5 million barrels.
